Yahoo Finance US$2.25: That's What Analysts Think Newpark Resources, Inc. (NYSE:NR) Is Worth After Its Latest Results
Newpark Resources, Inc. (NYSE:NR) shareholders are probably feeling a little disappointed, since its shares fell 9.1% to US$1.30 in the week after its latest first-quarter results. It was a pretty bad result overall; while revenues were in line with expectations at US$165m, statutory losses exploded to US$0.14 per share. 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. 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 Newpark Resources
Taking into account the latest results, the current consensus, from the three analysts covering Newpark Resources, is for revenues of US$571.0m in 2020, which would reflect a disturbing 26% reduction in Newpark Resources' sales over the past 12 months. Losses are supposed to decline, shrinking 15% from last year to US$0.25. Before this latest report, the consensus had been expecting revenues of US$573.5m and US$0.005 per share in losses. While this year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 10.0% to US$2.25 per share, with the analysts clearly concerned by ballooning losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Newpark Resources, with the most bullish analyst valuing it at US$3.00 and the most bearish at US$2.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Newpark Resources' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 26% revenue decline a notable change from historical growth of 3.6% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.9% next year. So it's pretty clear that Newpark Resources' revenues are expected to shrink faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. The consensus also reconfirmed their revenue estimates, suggesting that sales are performing in line with expectations. Plus, our data suggests that Newpark Resources is expected to 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 Newpark Resources' future valuation.
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 Newpark Resources going out to 2021, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Newpark Resources that you need to be mindful of.
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