Here's What Analysts Are Forecasting For Vertex Energy, Inc. (NASDAQ:VTNR) After Its Third-Quarter Results
It's been a good week for Vertex Energy, Inc. (NASDAQ:VTNR) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.5% to US$0.45. It looks like the results were pretty good overall. While revenues of US$37m were in line with analyst predictions, statutory losses were much smaller than expected, with Vertex Energy losing US$0.10 per share. 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. 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 Vertex Energy
Taking into account the latest results, the current consensus from Vertex Energy's three analysts is for revenues of US$177.7m in 2021, which would reflect a huge 29% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 92% to US$0.045. Before this latest report, the consensus had been expecting revenues of US$177.9m and US$0.047 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
There's been no major changes to the consensus price target of US$2.50, suggesting that reduced loss estimates are 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 Vertex Energy, with the most bullish analyst valuing it at US$4.00 and the most bearish at US$1.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's clear from the latest estimates that Vertex Energy's rate of growth is expected to accelerate meaningfully, with the forecast 29% revenue growth noticeably faster than its historical growth of 5.3%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Vertex Energy to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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 Vertex Energy going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Vertex Energy , and understanding these should be part of your investment process.
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. 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.
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