Analysts Just Published A Bright New Outlook For Liberty Oilfield Services Inc.'s (NYSE:LBRT)
Liberty Oilfield Services Inc. (NYSE:LBRT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After the upgrade, the ten analysts covering Liberty Oilfield Services are now predicting revenues of US$2.1b in 2021. If met, this would reflect a major 122% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 61% to US$0.53. However, before this estimates update, the consensus had been expecting revenues of US$1.9b and US$0.68 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
See our latest analysis for Liberty Oilfield Services
Despite these upgrades, the analysts have not made any major changes to their price target of US$12.45, implying that their latest estimates don't have a long term impact on what they think the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Liberty Oilfield Services analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$8.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. The analysts are definitely expecting Liberty Oilfield Services' growth to accelerate, with the forecast 122% growth ranking favourably alongside historical growth of 19% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Liberty Oilfield Services is expected to grow much faster than its industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Liberty Oilfield Services is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Liberty Oilfield Services.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential flags with Liberty Oilfield Services, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 2 other flags we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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