Liberty Energy Inc. Just Beat EPS By 6.5%: Here's What Analysts Think Will Happen Next

Last week saw the newest second-quarter earnings release from Liberty Energy Inc. (NYSE:LBRT), an important milestone in the company's journey to build a stronger business. Liberty Energy reported US$1.2b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.64 beat expectations, being 6.5% higher than what the analysts expected. 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.

Check out our latest analysis for Liberty Energy

Taking into account the latest results, Liberty Energy's 14 analysts currently expect revenues in 2024 to be US$4.46b, approximately in line with the last 12 months. Statutory earnings per share are forecast to drop 15% to US$2.21 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$4.61b and earnings per share (EPS) of US$2.43 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of US$24.90, suggesting the downgrades are not expected to have a long-term impact on Liberty Energy's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Liberty Energy analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$18.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Liberty Energy's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 2.9% annualised decline to the end of 2024. That is a notable change from historical growth of 27% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.5% per year. It's pretty clear that Liberty Energy's revenues are expected to perform substantially worse than 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 Liberty 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$24.90, 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. At Simply Wall St, we have a full range of analyst estimates for Liberty Energy going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Liberty Energy (including 1 which 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com