Ranger Energy Services, Inc. Just Missed EPS By 20%: Here's What Analysts Think Will Happen Next
It's been a good week for Ranger Energy Services, Inc. (NYSE:RNGR) shareholders, because the company has just released its latest annual results, and the shares gained 2.2% to US$10.94. It looks like a pretty bad result, all things considered. Although revenues of US$637m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 20% to hit US$0.95 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Ranger Energy Services
Taking into account the latest results, Ranger Energy Services' dual analysts currently expect revenues in 2024 to be US$643.3m, approximately in line with the last 12 months. Statutory earnings per share are predicted to expand 13% to US$1.19. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$645.2m and earnings per share (EPS) of US$1.52 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
The average price target fell 5.2% to US$13.75, with reduced earnings forecasts clearly tied to a lower valuation estimate.
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 would highlight that Ranger Energy Services' revenue growth is expected to slow, with the forecast 1.1% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Ranger Energy Services.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Ranger Energy Services' revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Ranger Energy Services. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Ranger Energy Services that 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.
