Yahoo Finance AKITA Drilling Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Investors in AKITA Drilling Ltd. (TSE:AKT.A) had a good week, as its shares rose 2.7% to close at CA$1.51 following the release of its first-quarter results. Revenues missed the mark, coming in 13% below forecasts, at CA$46m. Statutory profits were a real bright spot in contrast, with per-share profits of CA$0.07 being a notable 40% above what the analyst was modelling. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 analyst has changed their earnings models, following these results.
View our latest analysis for AKITA Drilling
Taking into account the latest results, the consensus forecast from AKITA Drilling's solitary analyst is for revenues of CA$229.0m in 2024. This reflects a decent 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dip 6.9% to CA$0.27 in the same period. In the lead-up to this report, the analyst had been modelling revenues of CA$217.0m and earnings per share (EPS) of CA$0.12 in 2024. There's been a pretty noticeable increase in sentiment, with the analyst upgrading revenues and making a massive increase in earnings per share in particular.
It will come as no surprise to learn that the analyst has increased their price target for AKITA Drilling 39% to CA$3.75on the back of these upgrades.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AKITA Drilling's past performance and to peers in the same industry. It's clear from the latest estimates that AKITA Drilling's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 9.4% per year. So it's clear with the acceleration in growth, AKITA Drilling is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AKITA Drilling's earnings potential next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for AKITA Drilling 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.
