Rainbows and Unicorns: NexTier Oilfield Solutions Inc. (NYSE:NEX) Analysts Just Became A Lot More Optimistic

NexTier Oilfield Solutions Inc. (NYSE:NEX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from NexTier Oilfield Solutions' nine analysts is for revenues of US$1.3b in 2021, which would reflect a major 43% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 54% to US$0.54. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$1.2b and losses of US$0.66 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for NexTier Oilfield Solutions

There was no major change to the consensus price target of US$5.53, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. 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. Currently, the most bullish analyst values NexTier Oilfield Solutions at US$6.00 per share, while the most bearish prices it at US$4.20. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await NexTier Oilfield Solutions shareholders.

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. The analysts are definitely expecting NexTier Oilfield Solutions' growth to accelerate, with the forecast 105% annualised growth to the end of 2021 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect NexTier Oilfield Solutions to grow faster than the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around NexTier Oilfield Solutions' prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So NexTier Oilfield Solutions could be a good candidate for more research.

It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. For more information, you can click through to our free platform to learn more about these forecasts.

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