SJW Group (NASDAQ:SJW) Just Released Its Yearly Earnings: Here's What Analysts Think

SJW Group (NASDAQ:SJW) defied analyst predictions to release its annual results, which were ahead of market expectations. Results were good overall, with revenues beating analyst predictions by 3.3% to hit US$748m. Statutory earnings per share (EPS) came in at US$2.87, some 4.5% above whatthe analysts had expected. 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 SJW Group after the latest results.

View our latest analysis for SJW Group

Following last week's earnings report, SJW Group's three analysts are forecasting 2025 revenues to be US$747.4m, approximately in line with the last 12 months. Per-share earnings are expected to rise 5.7% to US$2.95. Before this earnings report, the analysts had been forecasting revenues of US$764.0m and earnings per share (EPS) of US$2.95 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of US$60.20, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on SJW Group's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on SJW Group, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$55.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SJW Group is an easy business to forecast or the the analysts are all using similar assumptions.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.1% by the end of 2025. This indicates a significant reduction from annual growth of 8.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SJW Group is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on SJW Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple SJW Group analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with SJW Group (including 1 which makes us a bit uncomfortable) .

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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.