Reservoir Media, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders might have noticed that Reservoir Media, Inc. (NASDAQ:RSVR) filed its yearly result this time last week. The early response was not positive, with shares down 2.4% to US$6.45 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$122m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 33% to hit US$0.04 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Reservoir Media

Following the latest results, Reservoir Media's three analysts are now forecasting revenues of US$129.8m in 2024. This would be a satisfactory 6.1% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 180% to US$0.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$133.2m and earnings per share (EPS) of US$0.13 in 2024. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of US$12.67, suggesting the downgrades are not expected to have a long-term impact on Reservoir Media's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Reservoir Media analyst has a price target of US$13.00 per share, while the most pessimistic values it at US$12.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Reservoir Media's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.1% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Reservoir Media.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$12.67, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Reservoir Media going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Reservoir Media (including 1 which is significant) .

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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.