AKITA Drilling Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that AKITA Drilling Ltd. (TSE:AKT.A) released its quarterly result to the market. The early response was not positive, with shares down 2.0% to CA$1.46 in the past week. The results were mixed; although revenues of CA$46m fell 13% short of what the analyst had predicted, per-share (statutory) earnings of CA$0.07 beat expectations by 40%. Following the result, the analyst has 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've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

See our latest analysis for AKITA Drilling

Taking into account the latest results, the current consensus from AKITA Drilling's sole analyst is for revenues of CA$229.0m in 2024. This would reflect a notable 11% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 6.9% to CA$0.27 in the same period. Before this earnings report, the analyst had been forecasting 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.

With these upgrades, we're not surprised to see that the analyst has lifted their price target 39% to CA$3.75per share.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analyst is definitely expecting AKITA Drilling's growth to accelerate, with the forecast 15% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 9.4% annually. It seems obvious that as part of the brighter growth outlook, AKITA Drilling is expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards AKITA Drilling following these results. 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.

Even so, be aware that AKITA Drilling is showing 1 warning sign in our investment analysis , you should know about...

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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.