Yahoo Finance Kodiak Gas Services, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
As you might know, Kodiak Gas Services, Inc. (NYSE:KGS) recently reported its annual numbers. Statutory earnings per share fell badly short of expectations, coming in at US$0.29, some 58% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$850m. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Kodiak Gas Services
Following the latest results, Kodiak Gas Services' five analysts are now forecasting revenues of US$1.03b in 2024. This would be a major 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 594% to US$1.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$967.2m and earnings per share (EPS) of US$1.39 in 2024. So it seems there's been a definite increase in optimism about Kodiak Gas Services' future following the latest results, with a great increase in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.4% to US$27.00per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kodiak Gas Services at US$30.00 per share, while the most bearish prices it at US$24.00. This is a very narrow spread of estimates, implying either that Kodiak Gas Services is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Kodiak Gas Services' rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kodiak Gas Services is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kodiak Gas Services' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Kodiak Gas Services going out to 2025, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Kodiak Gas Services (2 are a bit unpleasant!) 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.
