Last week, you might have seen that Endeavour Silver Corp. (TSE:EDR) released its full-year result to the market. The early response was not positive, with shares down 7.7% to CA$2.46 in the past week. Revenues of US$122m arrived in line with expectations, although statutory losses per share were US$0.37, an impressive 36% smaller than what broker models predicted. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Endeavour Silver after the latest results.
Taking into account the latest results, the latest consensus from Endeavour Silver's five analysts is for revenues of US$125.9m in 2020, which would reflect a reasonable 3.4% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Endeavour Silver forecast to report a statutory profit of US$0.022 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$125.9m and earnings per share (EPS) of US$0.014 in 2020. Although the revenue estimates have not really changed, we can see there's been a sizeable expansion in earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of CA$2.90, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. There are some variant perceptions on Endeavour Silver, with the most bullish analyst valuing it at CA$3.00 and the most bearish at CA$2.70 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Further, we can compare these estimates to past performance, and see how Endeavour Silver forecasts compare to the wider market's forecast performance. One thing stands out from these estimates, which is that analysts are forecasting Endeavour Silver to grow faster in the future than it has in the past, with revenues expected to grow 3.4%. If achieved, this would be a much better result than the 8.6% annual decline over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 5.8% next year. Although Endeavour Silver's revenues are expected to improve, it seems that analysts are still bearish on the business, forecasting it to grow slower than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Endeavour Silver's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$2.90, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Endeavour Silver going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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