CES Energy Solutions Corp. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

CES Energy Solutions Corp. (TSE:CEU) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.6% to hit CA$553m. CES Energy Solutions also reported a statutory profit of CA$0.20, which was an impressive 33% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 CES Energy Solutions

Taking into account the latest results, the most recent consensus for CES Energy Solutions from seven analysts is for revenues of CA$2.33b in 2024. If met, it would imply a modest 4.3% increase on its revenue over the past 12 months. Statutory per share are forecast to be CA$0.81, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$2.29b and earnings per share (EPS) of CA$0.75 in 2024. So the consensus seems to have become somewhat more optimistic on CES Energy Solutions' earnings potential following these results.

The consensus price target rose 7.5% to CA$9.91, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic CES Energy Solutions analyst has a price target of CA$12.00 per share, while the most pessimistic values it at CA$8.50. 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.

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. It's pretty clear that there is an expectation that CES Energy Solutions' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.7% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 5.4% annually. Factoring in the forecast slowdown in growth, it's pretty clear that CES Energy Solutions is still expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards CES Energy Solutions following these results. Fortunately, they also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that CES Energy Solutions' revenue is expected to perform better than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on CES Energy Solutions. Long-term earnings power is much more important than next year's profits. We have forecasts for CES Energy Solutions going out to 2026, 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 2 warning signs for CES Energy Solutions that you need to be mindful 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.