VAALCO Energy, Inc. Just Missed EPS By 17%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that VAALCO Energy, Inc. (NYSE:EGY) released its quarterly result to the market. The early response was not positive, with shares down 5.4% to US$5.30 in the past week. It was not a great result overall. Although revenues beat expectations, hitting US$140m, statutory earnings missed analyst forecasts by 17%, coming in at just US$0.10 per share. 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.

View our latest analysis for VAALCO Energy

After the latest results, the consensus from VAALCO Energy's four analysts is for revenues of US$402.7m in 2025, which would reflect a stressful 20% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to dive 30% to US$0.60 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$414.0m and earnings per share (EPS) of US$0.70 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of US$9.17, suggesting the downgrades are not expected to have a long-term impact on VAALCO Energy's valuation. 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 VAALCO Energy at US$10.00 per share, while the most bearish prices it at US$8.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 17% by the end of 2025. This indicates a significant reduction from annual growth of 40% 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 3.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - VAALCO Energy is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for VAALCO Energy. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$9.17, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple VAALCO Energy analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that VAALCO Energy is showing 1 warning sign in our investment analysis , you should know about...

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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.