Results: Crescent Energy Company Exceeded Expectations And The Consensus Has Updated Its Estimates

Crescent Energy Company (NYSE:CRGY) just released its yearly report and things are looking bullish. The company beat forecasts, with revenue of US$2.4b, some 3.6% above estimates, and statutory earnings per share (EPS) coming in at US$1.02, 459% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Crescent Energy

Taking into account the latest results, Crescent Energy's six analysts currently expect revenues in 2024 to be US$2.41b, approximately in line with the last 12 months. Per-share earnings are expected to ascend 16% to US$0.85. In the lead-up to this report, the analysts had been modelling revenues of US$2.37b and earnings per share (EPS) of US$0.55 in 2024. So it seems there's been a definite increase in optimism about Crescent Energy's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$16.16, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values Crescent Energy at US$23.00 per share, while the most bearish prices it at US$12.30. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Crescent Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.3% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 1.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Crescent Energy is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Crescent Energy's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at US$16.16, 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 Crescent Energy going out to 2026, 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 4 warning signs with Crescent Energy , 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.