Earnings Beat: Artesian Resources Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for Artesian Resources Corporation (NASDAQ:ARTN.A) shareholders, because the company has just released its latest second-quarter results, and the shares gained 2.6% to US$46.47. Revenues US$25m disappointed slightly, at2.9% below what the analyst had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$0.44 coming in 19% above what was anticipated. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

View our latest analysis for Artesian Resources

Taking into account the latest results, Artesian Resources' one analyst currently expect revenues in 2023 to be US$101.0m, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 8.2% to US$1.75. In the lead-up to this report, the analyst had been modelling revenues of US$103.0m and earnings per share (EPS) of US$1.74 in 2023. So it's pretty clear that, although the analyst has updated their estimates, there's been no major change in expectations for the business following the latest results.

With no major changes to earnings forecasts, the consensus price target fell 6.7% to US$56.00, suggesting that the analyst might have previously been hoping for an earnings upgrade.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Artesian Resources' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 4.6% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.9% 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 Artesian Resources.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analyst holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Artesian Resources' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Even so, be aware that Artesian Resources is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

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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.