Earnings Update: New Fortress Energy LLC (NASDAQ:NFE) Just Reported And Analysts Are Trimming Their Forecasts
It's shaping up to be a tough period for New Fortress Energy LLC (NASDAQ:NFE), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at US$75m, but statutory earnings fell catastrophically short, with a loss of US$0.32 some 90% larger than what the analysts had predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for New Fortress Energy
Taking into account the latest results, the most recent consensus for New Fortress Energy from five analysts is for revenues of US$571.7m in 2020 which, if met, would be a major 145% increase on its sales over the past 12 months. Per-share statutory losses are expected to explode, reaching US$0.56 per share. Before this earnings report, the analysts had been forecasting revenues of US$681.4m and earnings per share (EPS) of US$0.06 in 2020. There looks to have been a major change in sentiment regarding New Fortress Energy's prospects following the latest results, with a real cut to revenues and the analysts now forecasting a loss instead of a profit.
The average price target was broadly unchanged at US$20.56, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic New Fortress Energy analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$16.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. It's clear from the latest estimates that New Fortress Energy's rate of growth is expected to accelerate meaningfully, with the forecast 145% revenue growth noticeably faster than its historical growth of 100% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.1% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that New Fortress Energy is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts are expecting New Fortress Energy to become unprofitable next year. They also downgraded their revenue estimates, although industry data suggests that New Fortress Energy's revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$20.56, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for New Fortress Energy going out to 2024, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 3 warning signs for New Fortress Energy (1 doesn't sit too well with us!) that you need to be mindful of.
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.
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. Thank you for reading.
