Xebec Adsorption Inc. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts
As you might know, Xebec Adsorption Inc. (CVE:XBC) recently reported its quarterly numbers. Revenues missed expectations, with sales of CA$18m falling 19% short of forecasts. Earnings correspondingly dipped, with Xebec Adsorption reporting a statutory loss of CA$0.02 per share, where the analysts were expecting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Xebec Adsorption
Taking into account the latest results, the current consensus from Xebec Adsorption's twelve analysts is for revenues of CA$127.1m in 2021, which would reflect a substantial 99% increase on its sales over the past 12 months. Earnings are expected to improve, with Xebec Adsorption forecast to report a statutory profit of CA$0.11 per share. Before this earnings report, the analysts had been forecasting revenues of CA$124.5m and earnings per share (EPS) of CA$0.12 in 2021. So it's pretty clear the analysts have mixed opinions on Xebec Adsorption after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.
There's been no major changes to the price target of CA$6.21, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. 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. Currently, the most bullish analyst values Xebec Adsorption at CA$7.00 per share, while the most bearish prices it at CA$5.30. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Xebec Adsorption is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Xebec Adsorption's growth to accelerate, with the forecast 99% growth ranking favourably alongside historical growth of 42% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Xebec Adsorption to grow faster than the wider industry.
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. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at CA$6.21, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Xebec Adsorption. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Xebec Adsorption 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 Xebec Adsorption that you should be aware of.
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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