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Analysts Have Made A Financial Statement On Dril-Quip, Inc.'s (NYSE:DRQ) Yearly Report

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Simply Wall St
·3 min read
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Dril-Quip, Inc. (NYSE:DRQ) shareholders are probably feeling a little disappointed, since its shares fell 4.6% to US$33.55 in the week after its latest yearly results. Revenues were in line with expectations, at US$365m, while statutory losses ballooned to US$0.87 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Dril-Quip

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the eight analysts covering Dril-Quip provided consensus estimates of US$350.7m revenue in 2021, which would reflect a noticeable 3.9% decline on its sales over the past 12 months. Before this earnings report, the analysts had been forecasting revenues of US$335.2m and break-even in 2021. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

There's been no real change to the consensus price target of US$30.96, with Dril-Quip seemingly executing in line with expectations. 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 Dril-Quip analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$26.00. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2021 compared to the historical decline of 15% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.6% per year. So while a broad number of companies are forecast to grow, unfortunately Dril-Quip is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at US$30.96, 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. We have estimates - from multiple Dril-Quip analysts - going out to 2025, and you can see them free on our platform here.

You can also see our analysis of Dril-Quip's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.