OPAL Fuels Inc. Just Missed Earnings - But Analysts Have Updated Their Models
It's been a good week for OPAL Fuels Inc. (NASDAQ:OPAL) shareholders, because the company has just released its latest full-year results, and the shares gained 2.1% to US$4.90. It was not a great result overall. While revenues of US$256m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit US$0.69 per share. 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 OPAL Fuels after the latest results.
Check out our latest analysis for OPAL Fuels
Following the latest results, OPAL Fuels' six analysts are now forecasting revenues of US$318.6m in 2024. This would be a huge 24% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 24% to US$0.84. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$378.5m and earnings per share (EPS) of US$1.05 in 2024. Indeed, we can see that the analysts are a lot more bearish about OPAL Fuels' prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
The analysts made no major changes to their price target of US$10.51, suggesting the downgrades are not expected to have a long-term impact on OPAL Fuels' 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 OPAL Fuels, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$5.00 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of OPAL Fuels'historical trends, as the 24% annualised revenue growth to the end of 2024 is roughly in line with the 23% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.7% annually. So although OPAL Fuels is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for OPAL Fuels. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$10.51, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for OPAL Fuels going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for OPAL Fuels that you need to take into consideration.
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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.
