U.S. Markets open in 1 hr 21 mins

What Do Analysts Think About Earthstone Energy, Inc.'s (NYSE:ESTE) Future?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

In December 2018, Earthstone Energy, Inc. (NYSE:ESTE) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by -23% next year against the higher past 5-year average growth rate of 11%. With trailing-twelve-month net income at current levels of US$42m, we should see this rise to US$33m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Earthstone Energy in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for Earthstone Energy

How will Earthstone Energy perform in the near future?

The longer term expectations from the 9 analysts of ESTE is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for ESTE, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:ESTE Past and Future Earnings, May 1st 2019

This results in an annual growth rate of 23% based on the most recent earnings level of US$42m to the final forecast of US$92m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $1.42 in the final year of forecast compared to the current $1.5 EPS today. In 2022, ESTE's profit margin will have expanded from 27% to 31%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Earthstone Energy, there are three pertinent aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Future Earnings: How does Earthstone Energy's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Earthstone Energy? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.