Prosafe SE (OB:PRS) Just Reported And Analysts Have Been Cutting Their Estimates

It's shaping up to be a tough period for Prosafe SE (OB:PRS), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. It was a pretty negative result overall, with revenues of US$98m missing analyst predictions by 2.8%. Additionally, the business reported a statutory loss of US$6.00 per share, larger than the analysts had forecast prior to the result. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Prosafe

Taking into account the latest results, the current consensus from Prosafe's twin analysts is for revenues of US$144.0m in 2024. This would reflect a substantial 47% increase on its revenue over the past 12 months. Per-share statutory losses are expected to explode, reaching US$1.74 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$212.6m and earnings per share (EPS) of US$1.62 in 2024. There looks to have been a major change in sentiment regarding Prosafe's prospects following the latest results, with a large cut to revenues and the analysts now forecasting a loss instead of a profit.

The consensus price target fell 27% to kr133, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Prosafe's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Prosafe is forecast to grow faster in the future than it has in the past, with revenues expected to display 47% annualised growth until the end of 2024. If achieved, this would be a much better result than the 17% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.8% per year. Not only are Prosafe's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Prosafe to become unprofitable next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Prosafe. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Prosafe going out as far as 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Prosafe (1 is significant!) that you should be aware of.

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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.