Time To Worry? Analysts Are Downgrading Their Dolphin Drilling AS (OB:DDRIL) Outlook

One thing we could say about the analysts on Dolphin Drilling AS (OB:DDRIL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the consensus from four analysts covering Dolphin Drilling is for revenues of US$75m in 2024, implying a considerable 8.1% decline in sales compared to the last 12 months. Losses are expected to increase substantially, hitting US$0.16 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$90m and losses of US$0.12 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Dolphin Drilling

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2024. This indicates a significant reduction from annual growth of 141% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Dolphin Drilling is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Dolphin Drilling. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Dolphin Drilling's revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Dolphin Drilling, and a few readers might choose to steer clear of the stock.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Dolphin Drilling going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.