Earnings Miss: VAALCO Energy, Inc. Missed EPS By 82% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on VAALCO Energy, Inc. (NYSE:EGY), given that the company fell short of expectations when it released its quarterly results last week. Results showed a clear earnings miss, with US$80m revenue coming in 8.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.03 missed the mark badly, arriving some 82% below what was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for VAALCO Energy

After the latest results, the dual analysts covering VAALCO Energy are now predicting revenues of US$419.4m in 2023. If met, this would reflect a meaningful 15% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 111% to US$0.84. In the lead-up to this report, the analysts had been modelling revenues of US$400.0m and earnings per share (EPS) of US$1.00 in 2023. So it's pretty clear the analysts have mixed opinions on VAALCO Energy after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

The consensus price target was unchanged at US$9.33, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the VAALCO Energy's past performance and to peers in the same industry. It's pretty clear that there is an expectation that VAALCO Energy's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.6% annually. So it's clear that despite the slowdown in growth, VAALCO Energy is still expected to grow meaningfully 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. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

It is also worth noting that we have found 3 warning signs for VAALCO Energy (1 is potentially serious!) that you need to take into consideration.

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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.