Topaz Energy Corp. Just Recorded A 71% EPS Beat: Here's What Analysts Are Forecasting Next

Investors in Topaz Energy Corp. (TSE:TPZ) had a good week, as its shares rose 5.0% to close at CA$25.99 following the release of its quarterly results. It looks like a credible result overall - although revenues of CA$78m were what the analysts expected, Topaz Energy surprised by delivering a (statutory) profit of CA$0.12 per share, an impressive 71% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Topaz Energy

Following last week's earnings report, Topaz Energy's five analysts are forecasting 2024 revenues to be CA$324.1m, approximately in line with the last 12 months. Statutory earnings per share are predicted to climb 15% to CA$0.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$321.5m and earnings per share (EPS) of CA$0.32 in 2024. Although the revenue estimates have not really changed, we can see there's been a considerable lift to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of CA$29.33, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Topaz Energy analyst has a price target of CA$34.00 per share, while the most pessimistic values it at CA$26.00. This is a very narrow spread of estimates, implying either that Topaz Energy is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Topaz Energy's revenue growth is expected to slow, with the forecast 3.9% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Topaz Energy.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Topaz Energy's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Topaz Energy's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 estimates - from multiple Topaz Energy analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Topaz Energy , and understanding this should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com