Vertex Energy, Inc. (NASDAQ:VTNR) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Vertex Energy, Inc. (NASDAQ:VTNR) just released its latest quarterly report and things are not looking great. It definitely looks like a negative result overall with revenues falling 19% short of analyst estimates at US$36m. Statutory losses were US$0.21 per share, 473% bigger than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Vertex Energy
Following the recent earnings report, the consensus from three analysts covering Vertex Energy is for revenues of US$123.1m in 2020, implying a stressful 23% decline in sales compared to the last 12 months. Losses are forecast to balloon 38% to US$0.49 per share. Before this latest report, the consensus had been expecting revenues of US$152.2m and US$0.23 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The consensus price target fell 5.9% to US$2.67, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Vertex Energy analyst has a price target of US$4.00 per share, while the most pessimistic values it at US$2.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. Over the past five years, revenues have declined around 0.3% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 23% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.2% per year. So while a broad number of companies are forecast to decline, unfortunately Vertex Energy is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Vertex Energy's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vertex Energy analysts - going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Vertex Energy that you should be aware of.
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