PHX Energy Services Corp. (TSE:PHX) Third-Quarter Results: Here's What Analysts Are Forecasting For Next Year

It's been a good week for PHX Energy Services Corp. (TSE:PHX) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.7% to CA$10.01. PHX Energy Services reported in line with analyst predictions, delivering revenues of CA$161m and statutory earnings per share of CA$1.96, suggesting the business is executing well and in line with its plan. 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.

Check out our latest analysis for PHX Energy Services

Following the latest results, PHX Energy Services' three analysts are now forecasting revenues of CA$685.3m in 2025. This would be a modest 6.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 2.9% to CA$1.65. Before this earnings report, the analysts had been forecasting revenues of CA$669.7m and earnings per share (EPS) of CA$1.62 in 2025. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of CA$12.00, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic PHX Energy Services analyst has a price target of CA$13.50 per share, while the most pessimistic values it at CA$11.00. This is a very narrow spread of estimates, implying either that PHX Energy Services is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that PHX Energy Services' revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. Compare this to the 24 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.0% per year. So it's pretty clear that, while PHX Energy Services' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at CA$12.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PHX Energy Services going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for PHX Energy Services you should be aware of, and 1 of them is a bit unpleasant.

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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.