Core Laboratories Inc. Just Missed Earnings - But Analysts Have Updated Their Models
It's been a sad week for Core Laboratories Inc. (NYSE:CLB), who've watched their investment drop 12% to US$14.83 in the week since the company reported its annual result. It looks like the results were a bit of a negative overall. While revenues of US$510m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.0% to hit US$0.86 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Core Laboratories
Taking into account the latest results, the current consensus from Core Laboratories' seven analysts is for revenues of US$528.1m in 2024. This would reflect an okay 3.6% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 26% to US$1.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$536.3m and earnings per share (EPS) of US$1.20 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$21.44, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 Core Laboratories analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$16.00. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Core Laboratories' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.6% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 8.5% a year 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 7.9% per year. Although Core Laboratories' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Core Laboratories' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Core Laboratories. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Core Laboratories analysts - 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 Core Laboratories you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
