Natural Gas Services Group, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for Natural Gas Services Group, Inc. (NYSE:NGS) shareholders, because the company has just released its latest third-quarter results, and the shares gained 5.4% to US$29.70. Revenues were US$43m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.46, an impressive 28% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Natural Gas Services Group after the latest results.

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After the latest results, the three analysts covering Natural Gas Services Group are now predicting revenues of US$193.5m in 2026. If met, this would reflect a notable 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 31% to US$1.94. Before this earnings report, the analysts had been forecasting revenues of US$194.6m and earnings per share (EPS) of US$1.75 in 2026. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

View our latest analysis for Natural Gas Services Group

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.5% to US$38.25. 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 Natural Gas Services Group at US$45.00 per share, while the most bearish prices it at US$34.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Natural Gas Services Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Natural Gas Services Group's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.6% per year. So it's pretty clear that, while Natural Gas Services Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Natural Gas Services Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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 Simply Wall St, we have a full range of analyst estimates for Natural Gas Services Group going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Natural Gas Services Group that you should be aware of.

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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.