Revenue Downgrade: Here's What Analysts Forecast For ONE Gas, Inc. (NYSE:OGS)
Today is shaping up negative for ONE Gas, Inc. (NYSE:OGS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the downgrade, the current consensus from ONE Gas' six analysts is for revenues of US$2.5b in 2024 which - if met - would reflect a modest 4.6% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$2.7b of revenue in 2024. It looks like the analysts have become a bit less bullish on ONE Gas, given the slight decrease in revenue estimates after the latest consensus updates.
Check out our latest analysis for ONE Gas
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 pretty clear that there is an expectation that ONE Gas' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that ONE Gas is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on ONE Gas after today.
Worse, ONE Gas is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. See why we're concerned about ONE Gas' balance sheet by visiting our risks dashboard for free on our platform here.
We also provide an overview of the ONE Gas Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.
