Arabian Drilling Company Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Arabian Drilling Company (TADAWUL:2381) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Statutory earnings per share of ر.س0.84 unfortunately missed expectations by 15%, although it was encouraging to see revenues of ر.س911m exceed expectations by 2.1%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

We've discovered 3 warning signs about Arabian Drilling. View them for free.

Following the latest results, Arabian Drilling's ten analysts are now forecasting revenues of ر.س3.75b in 2025. This would be a reasonable 5.3% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be ر.س2.77, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ر.س3.67b and earnings per share (EPS) of ر.س4.35 in 2025. So it's pretty clear the analysts have mixed opinions on Arabian Drilling after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

Check out our latest analysis for Arabian Drilling

There's been no major changes to the price target of ر.س114, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Arabian Drilling at ر.س163 per share, while the most bearish prices it at ر.س90.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Arabian Drilling is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.1% annualised growth until the end of 2025. If achieved, this would be a much better result than the 2.7% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.8% per year. So while Arabian Drilling's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Arabian Drilling. They also upgraded their revenue forecasts, although the latest estimates suggest that Arabian Drilling will grow in line with the overall industry. The consensus price target held steady at ر.س114, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Arabian Drilling going out to 2027, 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 Arabian Drilling (at least 2 which are concerning) , and understanding these 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.