Serinus Energy plc (LON:SENX) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

There's been a notable change in appetite for Serinus Energy plc (LON:SENX) shares in the week since its full-year report, with the stock down 10% to UK£0.017. The result was fairly weak overall, with revenues of US$40m being 3.1% less than what the analysts had been modelling. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Serinus Energy after the latest results.

View our latest analysis for Serinus Energy

Following the latest results, Serinus Energy's three analysts are now forecasting revenues of US$54.3m in 2022. This would be a major 36% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 41% to US$0.011. Before this earnings report, the analysts had been forecasting revenues of US$47.1m and earnings per share (EPS) of US$0.0061 in 2022. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to UK£0.059per share. 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 Serinus Energy, with the most bullish analyst valuing it at UK£0.064 and the most bearish at UK£0.055 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 36% growth on an annualised basis. That is in line with its 32% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.5% annually. So although Serinus Energy is expected to maintain its revenue growth rate, it's definitely expected 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 Serinus Energy's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Serinus Energy analysts - going out to 2023, and you can see them free on our platform here.

You still need to take note of risks, for example - Serinus Energy has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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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.