Earnings Miss: Atlas Energy Solutions Inc. Missed EPS By 43% And Analysts Are Revising Their Forecasts

It's been a good week for Atlas Energy Solutions Inc. (NYSE:AESI) shareholders, because the company has just released its latest yearly results, and the shares gained 2.8% to US$18.86. Statutory earnings per share fell badly short of expectations, coming in at US$1.48, some 43% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$614m. 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 Atlas Energy Solutions after the latest results.

See our latest analysis for Atlas Energy Solutions

Taking into account the latest results, the current consensus from Atlas Energy Solutions' three analysts is for revenues of US$745.9m in 2024. This would reflect a sizeable 21% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 133% to US$2.45. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$712.1m and earnings per share (EPS) of US$2.58 in 2024. So it's pretty clear consensus is mixed on Atlas Energy Solutions after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

The consensus price target was unchanged at US$24.11, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Atlas Energy Solutions at US$28.00 per share, while the most bearish prices it at US$20.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Atlas Energy Solutions shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Atlas Energy Solutions' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 21% growth on an annualised basis. This is compared to a historical growth rate of 56% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.6% per year. Even after the forecast slowdown in growth, it seems obvious that Atlas Energy Solutions is also expected to grow faster than the wider 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Atlas Energy Solutions. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Atlas Energy Solutions analysts - going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Atlas Energy Solutions (1 can't be ignored!) that 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.