Yahoo Finance Civeo Corporation Just Reported, And Analysts Assigned A US$3.25 Price Target
As you might know, Civeo Corporation (NYSE:CVEO) just kicked off its latest annual results with some very strong numbers. Revenues and losses per share were both better than expected, with revenues of US$528m leading estimates by 3.5%. Statutory losses were smaller than analysts expected, coming in at US$0.36 per share. Following the result, 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Civeo
Taking into account the latest results, the latest consensus from Civeo's twin analysts is for revenues of US$566.9m in 2020, which would reflect a credible 7.4% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to explode, reaching US$0.06 per share. Before this earnings announcement, analysts had been forecasting revenues of US$583.0m and losses of US$0.20 per share in 2020. While revenue forecasts have been revised downwards, analysts look to have become more optimistic on the company's earnings power, given the very substantial lift in to earnings per share forecasts.
The consensus price target fell 11% to US$3.25, with the dip in revenue estimates clearly souring analyst sentiment, despite the forecast reduction in losses.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. For example, we noticed that Civeo's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 7.4%, well above its historical decline of 12% a year over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 5.2% next year. So it looks like Civeo is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Civeo's revenues are expected to grow faster than the wider market. Still, earnings are more important to the intrinsic value of the business. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
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 2021, which can be seen for free on our platform here.
You can also view our analysis of Civeo's balance sheet, and whether we think Civeo is carrying too much debt, for free on our platform here.
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