It's been a pretty great week for National Energy Services Reunited Corp. (NASDAQ:NESR) shareholders, with its shares surging 10% to US$13.25 in the week since its latest yearly results. The result was positive overall - although revenues of US$834m were in line with what the analysts predicted, National Energy Services Reunited surprised by delivering a statutory profit of US$0.56 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from National Energy Services Reunited's six analysts is for revenues of US$979.9m in 2021, which would reflect a decent 17% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 51% to US$0.85. In the lead-up to this report, the analysts had been modelling revenues of US$977.8m and earnings per share (EPS) of US$0.87 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target rose 8.0% to US$17.29despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of National Energy Services Reunited's earnings by assigning a price premium. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic National Energy Services Reunited analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$14.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that National Energy Services Reunited's revenue growth will slow down substantially, with revenues next year expected to grow 17%, compared to a historical growth rate of 27% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% next year. Even after the forecast slowdown in growth, it seems obvious that National Energy Services Reunited is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for National Energy Services Reunited going out to 2022, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for National Energy Services Reunited that you need to take into consideration.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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