Earnings Beat: StealthGas Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, StealthGas Inc. (NASDAQ:GASS) just kicked off its latest full-year results with some very strong numbers. StealthGas beat earnings, with revenues hitting US$153m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

See our latest analysis for StealthGas

Taking into account the latest results, the solitary analyst covering StealthGas provided consensus estimates of US$146.8m revenue in 2023, which would reflect a small 3.9% decline on its sales over the past 12 months. Statutory earnings per share are forecast to descend 12% to US$0.79 in the same period. In the lead-up to this report, the analyst had been modelling revenues of US$156.6m and earnings per share (EPS) of US$0.89 in 2023. The analyst seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.

What's most unexpected is that the consensus price target rose 75% to US$7.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 1.6% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 3.9% decline in revenue until the end of 2023. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to decline 5.8% annually. So it's pretty clear that, although revenues are shrinking, at least StealthGas'revenues are expected to decline at a slower rate than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for StealthGas going out as far as 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for StealthGas 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.