ONE Gas, Inc. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

It's been a good week for ONE Gas, Inc. (NYSE:OGS) shareholders, because the company has just released its latest yearly results, and the shares gained 2.2% to US$73.13. Revenues were US$2.1b, 13% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of US$3.91 being in line with what the analysts forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for ONE Gas

After the latest results, the nine analysts covering ONE Gas are now predicting revenues of US$2.40b in 2025. If met, this would reflect a decent 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 14% to US$4.25. Before this earnings report, the analysts had been forecasting revenues of US$2.54b and earnings per share (EPS) of US$4.23 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of US$73.83, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on ONE Gas' market value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ONE Gas, with the most bullish analyst valuing it at US$82.00 and the most bearish at US$66.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 clear from the latest estimates that ONE Gas' rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 9.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ONE Gas 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. They also downgraded ONE Gas' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$73.83, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on ONE Gas. 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 ONE Gas going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for ONE Gas (of which 1 is 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.