Southwest Gas Holdings, Inc. Just Recorded A 60% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Southwest Gas Holdings, Inc. (NYSE:SWX) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of US$1.2b, some 8.3% above estimates, and statutory earnings per share (EPS) coming in at US$0.04, 60% ahead of expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Southwest Gas Holdings

Following the recent earnings report, the consensus from four analysts covering Southwest Gas Holdings is for revenues of US$3.94b in 2024. This implies a painful 28% decline in revenue compared to the last 12 months. Southwest Gas Holdings is also expected to turn profitable, with statutory earnings of US$3.08 per share. Before this earnings report, the analysts had been forecasting revenues of US$3.96b and earnings per share (EPS) of US$3.02 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$69.40, showing that the business is executing well and in line with expectations. 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 Southwest Gas Holdings, with the most bullish analyst valuing it at US$89.00 and the most bearish at US$62.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 23% by the end of 2024. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. It's pretty clear that Southwest Gas Holdings' revenues are expected to perform substantially worse 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Southwest Gas Holdings' revenue is expected to perform worse 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.

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 Southwest Gas Holdings going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Southwest Gas Holdings (2 are potentially serious!) that you need to take into consideration.

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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.