A week ago, National Energy Services Reunited Corp. (NASDAQ:NESR) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of US$218m arriving 6.1% ahead of forecasts. Statutory earnings per share (EPS) were US$0.13, 2.8% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on National Energy Services Reunited after the latest results.
After the latest results, the six analysts covering National Energy Services Reunited are now predicting revenues of US$980.7m in 2021. If met, this would reflect a substantial 22% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 97% to US$0.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$959.2m and earnings per share (EPS) of US$0.81 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$13.71, suggesting that the forecast performance does not have a long term impact on the company'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. Currently, the most bullish analyst values National Energy Services Reunited at US$18.00 per share, while the most bearish prices it at US$11.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await National Energy Services Reunited shareholders.
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. For example, we noticed that National Energy Services Reunited's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 22%, well above its historical decline of 8.2% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.2% per year. So it looks like National Energy Services Reunited is expected to grow faster than its competitors, at least for a while.
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 National Energy Services Reunited following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$13.71, 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 National Energy Services Reunited 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 2 warning signs for National Energy Services Reunited that you need to be mindful of.
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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