Smart Sand, Inc. Beat Analyst Profit Forecasts, And Analysts Have New Estimates
It's been a good week for Smart Sand, Inc. (NASDAQ:SND) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.9% to US$1.41. In addition to smashing expectations with revenues of US$23m, Smart Sand delivered a surprise statutory profit of US$0.91 per share, a notable improvement compared to analyst expectations of a loss. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Smart Sand after the latest results.
See our latest analysis for Smart Sand
Following the recent earnings report, the consensus from four analysts covering Smart Sand is for revenues of US$121.2m in 2021, implying a definite 16% decline in sales compared to the last 12 months. The company is forecast to report a statutory loss of US$0.21 in 2021, a sharp decline from a profit over the last year. Before this latest report, the consensus had been expecting revenues of US$108.9m and US$0.21 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
The consensus price target rose 13% to US$2.13, with the analysts encouraged by the improved revenue outlook even though the company remains lossmaking. 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 Smart Sand, with the most bullish analyst valuing it at US$2.50 and the most bearish at US$2.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Smart Sand's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 16%, a significant reduction from annual growth of 30% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Smart Sand is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Smart Sand. Long-term earnings power is much more important than next year's profits. We have forecasts for Smart Sand going out to 2022, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with Smart Sand (including 1 which can't be ignored) .
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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