Himalaya Shipping Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

Himalaya Shipping Ltd. (OB:HSHP) shareholders are probably feeling a little disappointed, since its shares fell 2.0% to kr93.00 in the week after its latest quarterly results. Statutory earnings per share fell badly short of expectations, coming in at US$0.06, some 39% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$24m. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Himalaya Shipping

Following the latest results, Himalaya Shipping's five analysts are now forecasting revenues of US$122.2m in 2024. This would be a huge 108% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 555% to US$0.60. Before this earnings report, the analysts had been forecasting revenues of US$123.4m and earnings per share (EPS) of US$1.15 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The consensus price target held steady at kr94.18, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Himalaya Shipping, with the most bullish analyst valuing it at kr111 and the most bearish at kr80.57 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Himalaya Shipping's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 165% growth on an annualised basis. This is compared to a historical growth rate of 3,983% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 0.7% annually. So it's pretty clear that, while Himalaya Shipping's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Himalaya Shipping. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Himalaya Shipping going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Himalaya Shipping (at least 2 which don't sit too well with us) , and understanding them should be part of your investment process.

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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.