Here's What Analysts Are Forecasting For Enviva Inc. (NYSE:EVA) After Its Full-Year Results

It's been a pretty great week for Enviva Inc. (NYSE:EVA) shareholders, with its shares surging 14% to US$76.98 in the week since its latest full-year results. The result was fairly weak overall, with revenues of US$1.0b being 4.3% less than what the analysts had been modelling. 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. 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 Enviva

Taking into account the latest results, the most recent consensus for Enviva from five analysts is for revenues of US$1.36b in 2022 which, if met, would be a substantial 30% increase on its sales over the past 12 months. Earnings are expected to improve, with Enviva forecast to report a statutory profit of US$0.69 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.37b and earnings per share (EPS) of US$0.71 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$75.60, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Enviva at US$78.00 per share, while the most bearish prices it at US$73.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Enviva is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Enviva's growth to accelerate, with the forecast 30% annualised growth to the end of 2022 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Enviva 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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$75.60, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Enviva. Long-term earnings power is much more important than next year's profits. We have forecasts for Enviva going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Enviva (2 don't sit too well with us!) 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.