Patterson-UTI Energy, Inc. Just Missed EPS By 59%: Here's What Analysts Think Will Happen Next

Patterson-UTI Energy, Inc. (NASDAQ:PTEN) just released its latest quarterly report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$1.3b, statutory earnings missed forecasts by an incredible 59%, coming in at just US$0.03 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Patterson-UTI Energy

Following last week's earnings report, Patterson-UTI Energy's 15 analysts are forecasting 2024 revenues to be US$5.52b, approximately in line with the last 12 months. Statutory earnings per share are expected to dive 30% to US$0.22 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$5.83b and earnings per share (EPS) of US$0.40 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the US$14.19 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Patterson-UTI Energy, with the most bullish analyst valuing it at US$19.00 and the most bearish at US$12.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Patterson-UTI Energy's revenue growth is expected to slow, with the forecast 2.4% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Patterson-UTI Energy.

The Bottom Line

The most important thing to take away is that the analysts 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 underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 Patterson-UTI Energy analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 5 warning signs for Patterson-UTI Energy (1 is potentially serious) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com