Acadian Timber Corp. Just Missed Earnings - But Analysts Have Updated Their Models

Acadian Timber Corp. (TSE:ADN) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenue came in at CA$41m, beating expectations by a remarkable 22%, while statutory earnings per share (EPS) were CA$0.46, missing estimates by an equally remarkable 43%. The analyst 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

Check out our latest analysis for Acadian Timber

Following the latest results, Acadian Timber's solitary analyst are now forecasting revenues of CA$127.9m in 2024. This would be a modest 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to fall 15% to CA$1.56 in the same period. In the lead-up to this report, the analyst had been modelling revenues of CA$122.6m and earnings per share (EPS) of CA$0.85 in 2024. So it seems there's been a definite increase in optimism about Acadian Timber's future following the latest results, with a sizeable expansion in the earnings per share forecasts in particular.

Althoughthe analyst has upgraded their earnings estimates, there was no change to the consensus price target of CA$20.33, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Acadian Timber's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Acadian Timber to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Acadian Timber's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at CA$20.33, with the latest estimates not enough to have an impact on their price target.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Acadian Timber going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 4 warning signs for Acadian Timber (1 makes us a bit uncomfortable!) that you need to take into consideration.

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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.

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