Earnings Miss: Ecora Resources PLC Missed EPS By 20% And Analysts Are Revising Their Forecasts

As you might know, Ecora Resources PLC (LON:ECOR) recently reported its full-year numbers. It looks like a pretty bad result, all things considered. Although revenues of US$142m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 20% to hit US$0.39 per share. The analysts 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Ecora Resources

Taking into account the latest results, the current consensus, from the four analysts covering Ecora Resources, is for revenues of US$79.9m in 2023, which would reflect a disturbing 44% reduction in Ecora Resources' sales over the past 12 months. Statutory earnings per share are expected to tumble 61% to US$0.14 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$85.6m and earnings per share (EPS) of US$0.14 in 2023. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was reduced 7.6% to UK£2.19, with the lower revenue forecasts indicating negative sentiment towards Ecora Resources, even though earnings forecasts were unchanged. 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 Ecora Resources analyst has a price target of UK£2.40 per share, while the most pessimistic values it at UK£1.90. This is a very narrow spread of estimates, implying either that Ecora Resources is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ecora Resources' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 44% by the end of 2023. This indicates a significant reduction from annual growth of 20% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.3% annually for the foreseeable future. So it's pretty clear that Ecora Resources' revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately they also cut their revenue estimates for next year, and forecasts imply the business' revenues are expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. Still, earnings per share are more important to value creation for shareholders. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Ecora Resources going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 4 warning signs for Ecora Resources (of which 1 makes us a bit uncomfortable!) 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.