California Water Service Group Just Missed Earnings - But Analysts Have Updated Their Models

California Water Service Group (NYSE:CWT) just released its latest third-quarter report and things are not looking great. California Water Service Group missed earnings this time around, with US$255m revenue coming in 5.5% below what the analysts had modelled. Statutory earnings per share (EPS) of US$0.60 also fell short of expectations by 18%. The analysts 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for California Water Service Group

Taking into account the latest results, the most recent consensus for California Water Service Group from four analysts is for revenues of US$929.5m in 2024. If met, it would imply a notable 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 209% to US$2.22. In the lead-up to this report, the analysts had been modelling revenues of US$926.0m and earnings per share (EPS) of US$2.19 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$51.75, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on California Water Service Group, with the most bullish analyst valuing it at US$57.00 and the most bearish at US$47.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting California Water Service 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. The analysts are definitely expecting California Water Service Group's growth to accelerate, with the forecast 15% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect California Water Service Group to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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 California Water Service Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for California Water Service Group going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 4 warning signs for California Water Service Group (of which 2 are potentially serious!) you should know about.

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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.