ProPetro Holding Corp. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

ProPetro Holding Corp. (NYSE:PUMP) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$283m, some 2.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.11, 96% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for ProPetro Holding

After the latest results, the seven analysts covering ProPetro Holding are now predicting revenues of US$1.27b in 2022. If met, this would reflect a substantial 28% improvement in sales compared to the last 12 months. Earnings are expected to improve, with ProPetro Holding forecast to report a statutory profit of US$0.98 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.29b and earnings per share (EPS) of US$0.64 in 2022. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the sizeable expansion in earnings per share expectations following these results.

The consensus price target was unchanged at US$17.05, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 ProPetro Holding at US$21.00 per share, while the most bearish prices it at US$13.00. 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.

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. For example, we noticed that ProPetro Holding's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 39% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 2.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.6% annually. So it looks like ProPetro Holding is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards ProPetro Holding following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$17.05, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for ProPetro Holding going out to 2024, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.