Natural Gas Services Group, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Investors in Natural Gas Services Group, Inc. (NYSE:NGS) had a good week, as its shares rose 8.0% to close at US$9.45 following the release of its annual results. Sales of US$68m surpassed estimates by 3.0%, although statutory earnings per share missed badly, coming in 22% below expectations at US$0.14 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Natural Gas Services Group

Following last week's earnings report, Natural Gas Services Group's two analysts are forecasting 2021 revenues to be US$67.1m, approximately in line with the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.13 per share in 2021. Before this earnings announcement, the analysts had been modelling revenues of US$65.8m and losses of US$0.13 per share in 2021. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

The average price target rose 6.7% to US$16.00, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2021 compared to the historical decline of 3.5% 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 see their revenue grow 6.8% per year. So while a broad number of companies are forecast to grow, unfortunately Natural Gas Services Group is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Natural Gas Services Group .

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This article by Simply Wall St is general in nature. 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.
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