Revenue Miss: The Navigator Company, S.A. Fell 6.0% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

Investors in The Navigator Company, S.A. (ELI:NVG) had a good week, as its shares rose 3.0% to close at €3.66 following the release of its quarterly results. Revenues came in 6.0% below expectations, at €478m. Statutory earnings per share were relatively better off, with a per-share profit of €0.55 being roughly in line with analyst estimates. 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 Navigator Company after the latest results.

View our latest analysis for Navigator Company

Taking into account the latest results, the five analysts covering Navigator Company provided consensus estimates of €1.96b revenue in 2023, which would reflect a discernible 7.1% decline over the past 12 months. Statutory earnings per share are forecast to nosedive 26% to €0.34 in the same period. Before this earnings report, the analysts had been forecasting revenues of €1.94b and earnings per share (EPS) of €0.34 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of €3.97, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Navigator Company at €4.70 per share, while the most bearish prices it at €3.15. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2023. This indicates a significant reduction from annual growth of 7.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.6% annually for the foreseeable future. It's pretty clear that Navigator Company's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

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 Navigator Company analysts - going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Navigator Company you should be aware of, and 1 of them makes us a bit uncomfortable.

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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.