EQT Holdings Limited Just Missed Earnings - But Analysts Have Updated Their Models

Investors in EQT Holdings Limited (ASX:EQT) had a good week, as its shares rose 2.1% to close at AU$26.00 following the release of its full-year results. Revenues of AU$112m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at AU$1.15, missing estimates by 5.1%. 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 EQT Holdings

Following the latest results, EQT Holdings' four analysts are now forecasting revenues of AU$126.3m in 2023. This would be a decent 13% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to shrink 7.6% to AU$1.06 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$117.2m and earnings per share (EPS) of AU$1.31 in 2023. While next year's revenue estimates increased, there was also a real cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

There's been no major changes to the price target of AU$32.75, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic EQT Holdings analyst has a price target of AU$35.00 per share, while the most pessimistic values it at AU$30.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 EQT Holdings' growth to accelerate, with the forecast 13% annualised growth to the end of 2023 ranking favourably alongside historical growth of 5.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that EQT Holdings is expected to grow much faster than its 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 AU$32.75, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple EQT Holdings analysts - going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for EQT Holdings 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.