Cool Company Ltd. Just Missed EPS By 66%: Here's What Analysts Think Will Happen Next

There's been a notable change in appetite for Cool Company Ltd. (OB:CLCO) shares in the week since its quarterly report, with the stock down 13% to kr102. It looks like a pretty bad result, all things considered. Although revenues of US$82m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 66% to hit US$0.15 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cool after the latest results.

View our latest analysis for Cool

Taking into account the latest results, the consensus forecast from Cool's four analysts is for revenues of US$361.7m in 2025. This reflects a notable 8.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 4.3% to US$1.65 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$374.5m and earnings per share (EPS) of US$1.78 in 2025. 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 consensus price target fell 10% to kr133, with the weaker earnings outlook clearly leading valuation estimates. 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. Currently, the most bullish analyst values Cool at kr165 per share, while the most bearish prices it at kr100. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cool's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Cool's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.7% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 4.8% per year. Factoring in the forecast slowdown in growth, it's pretty clear that Cool is still expected to grow faster 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. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Cool's future valuation.

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

And what about risks? Every company has them, and we've spotted 5 warning signs for Cool (of which 2 make us 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.