Time To Worry? Analysts Are Downgrading Their PHX Minerals Inc. (NYSE:PHX) Outlook

One thing we could say about the analysts on PHX Minerals Inc. (NYSE:PHX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from PHX Minerals' two analysts is for revenues of US$37m in 2024, which would reflect a modest 4.6% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to crater 62% to US$0.14 in the same period. Before this latest update, the analysts had been forecasting revenues of US$44m and earnings per share (EPS) of US$0.26 in 2024. Indeed, we can see that the analysts are a lot more bearish about PHX Minerals' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for PHX Minerals

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. We would highlight that PHX Minerals' revenue growth is expected to slow, with the forecast 4.6% annualised growth rate until the end of 2024 being well below the historical 9.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.7% annually. Even after the forecast slowdown in growth, it seems obvious that PHX Minerals is also expected to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for PHX Minerals. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on PHX Minerals, and their negativity could be grounds for caution.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for PHX Minerals going out as far as 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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

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.