Thor Explorations Ltd. Just Beat Revenue By 5.6%: Here's What Analysts Think Will Happen Next

It's been a mediocre week for Thor Explorations Ltd. (CVE:THX) shareholders, with the stock dropping 10% to CA$0.30 in the week since its latest second-quarter results. Results overall were respectable, with statutory earnings of US$0.039 per share roughly in line with what the analysts had forecast. Revenues of US$42m came in 5.6% ahead of analyst predictions. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Thor Explorations

Following the recent earnings report, the consensus from four analysts covering Thor Explorations is for revenues of US$153.4m in 2023. This implies an uneasy 15% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to plummet 54% to US$0.019 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$167.9m and earnings per share (EPS) of US$0.02 in 2023. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of CA$0.64, suggesting the downgrades are not expected to have a long-term impact on Thor Explorations' valuation. 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. There are some variant perceptions on Thor Explorations, with the most bullish analyst valuing it at CA$0.75 and the most bearish at CA$0.50 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Thor Explorations' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 28% annualised decline to the end of 2023. That is a notable change from historical growth of 89% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. It's pretty clear that Thor Explorations' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$0.64, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Thor Explorations going out to 2025, 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 Thor Explorations , and understanding this should be part of your investment process.

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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.