Kodiak Gas Services, Inc. Just Missed EPS By 58%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Kodiak Gas Services, Inc. (NYSE:KGS) released its full-year result to the market. The early response was not positive, with shares down 3.8% to US$25.53 in the past week. Statutory earnings per share fell badly short of expectations, coming in at US$0.29, some 58% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$850m. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kodiak Gas Services after the latest results.

View our latest analysis for Kodiak Gas Services

Taking into account the latest results, the current consensus from Kodiak Gas Services' five analysts is for revenues of US$1.03b in 2024. This would reflect a huge 21% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 560% to US$1.71. Before this earnings report, the analysts had been forecasting revenues of US$967.2m and earnings per share (EPS) of US$1.39 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a sizeable expansion in earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Kodiak Gas Services 8.4% to US$27.50on the back of these upgrades. 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 Kodiak Gas Services at US$30.00 per share, while the most bearish prices it at US$25.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kodiak Gas Services' past performance and to peers in the same industry. The analysts are definitely expecting Kodiak Gas Services' growth to accelerate, with the forecast 21% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kodiak Gas Services to grow faster 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 Kodiak Gas Services' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Kodiak Gas Services going out to 2026, and you can see them free on our platform here..

Even so, be aware that Kodiak Gas Services is showing 4 warning signs in our investment analysis , and 2 of those shouldn't be ignored...

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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.