Patterson-UTI Energy, Inc. (NASDAQ:PTEN) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Shareholders might have noticed that Patterson-UTI Energy, Inc. (NASDAQ:PTEN) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.9% to US$10.59 in the past week. Patterson-UTI Energy reported in line with analyst predictions, delivering revenues of US$1.5b and statutory earnings per share of US$0.13, suggesting the business is executing well and in line with its plan. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Patterson-UTI Energy

After the latest results, the 14 analysts covering Patterson-UTI Energy are now predicting revenues of US$6.08b in 2024. If met, this would reflect a major 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 18% to US$0.58. In the lead-up to this report, the analysts had been modelling revenues of US$6.16b and earnings per share (EPS) of US$0.63 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$15.94, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Patterson-UTI Energy analyst has a price target of US$19.00 per share, while the most pessimistic values it at US$14.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Patterson-UTI Energy's past performance and to peers in the same industry. It's clear from the latest estimates that Patterson-UTI Energy's rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Patterson-UTI Energy is expected to grow much faster than its industry.

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. 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. The consensus price target held steady at US$15.94, with the latest estimates not enough to have an impact on their price targets.

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 Patterson-UTI Energy going out to 2026, and you can see them free on our platform here..

Even so, be aware that Patterson-UTI Energy is showing 5 warning signs in our investment analysis , and 1 of those is concerning...

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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.