Advantage Energy Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Investors in Advantage Energy Ltd. (TSE:AAV) had a good week, as its shares rose 3.2% to close at CA$10.35 following the release of its yearly results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at CA$535m, statutory earnings beat expectations by a notable 13%, coming in at CA$0.59 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Advantage Energy after the latest results.
View our latest analysis for Advantage Energy
Taking into account the latest results, the consensus forecast from Advantage Energy's four analysts is for revenues of CA$585.5m in 2024. This reflects a decent 9.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 18% to CA$0.75. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$587.8m and earnings per share (EPS) of CA$0.65 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.
There's been no major changes to the consensus price target of CA$12.77, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Advantage Energy analyst has a price target of CA$17.00 per share, while the most pessimistic values it at CA$10.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Advantage Energy's revenue growth is expected to slow, with the forecast 9.4% annualised growth rate until the end of 2024 being well below the historical 28% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.4% per year. So it's pretty clear that, while Advantage Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Advantage Energy following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CA$12.77, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Advantage Energy going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 1 warning sign for Advantage Energy you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
