Earnings Miss: California Water Service Group Missed EPS By 53% And Analysts Are Revising Their Forecasts
California Water Service Group (NYSE:CWT) just released its latest yearly report and things are not looking great. Results showed a clear earnings miss, with US$795m revenue coming in 8.9% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.91 missed the mark badly, arriving some 53% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for California Water Service Group
Taking into account the latest results, the most recent consensus for California Water Service Group from four analysts is for revenues of US$921.4m in 2024. If met, it would imply a meaningful 16% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 174% to US$2.47. In the lead-up to this report, the analysts had been modelling revenues of US$939.2m and earnings per share (EPS) of US$2.25 in 2024. So the consensus seems to have become somewhat more optimistic on California Water Service Group's earnings potential following these results.
There's been no major changes to the consensus price target of US$50.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. There are some variant perceptions on California Water Service Group, with the most bullish analyst valuing it at US$57.00 and the most bearish at US$43.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 California Water Service Group's growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.4% 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 grow their revenue at 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect California Water Service Group to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards California Water Service Group following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for California Water Service Group going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for California Water Service Group (2 are potentially serious) you should be aware of.
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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.
