Results: VAALCO Energy, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, VAALCO Energy, Inc. (NYSE:EGY) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 5.0% to hit US$455m. VAALCO Energy also reported a statutory profit of US$0.56, which was an impressive 35% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on VAALCO Energy after the latest results.

Check out our latest analysis for VAALCO Energy

Following the recent earnings report, the consensus from four analysts covering VAALCO Energy is for revenues of US$417.3m in 2024. This implies an uneasy 8.3% decline in revenue compared to the last 12 months. Per-share earnings are expected to bounce 55% to US$0.90. Before this earnings report, the analysts had been forecasting revenues of US$410.8m and earnings per share (EPS) of US$0.81 in 2024. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of US$8.75, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic VAALCO Energy analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$7.25. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.3% by the end of 2024. This indicates a significant reduction from annual growth of 39% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.7% annually for the foreseeable future. It's pretty clear that VAALCO Energy's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around VAALCO Energy's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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. We have forecasts for VAALCO Energy going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with VAALCO Energy .

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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.