StealthGas Inc. Just Recorded A 159% EPS Beat: Here's What Analysts Are Forecasting Next

StealthGas Inc. (NASDAQ:GASS) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.7% to hit US$38m. StealthGas also reported a statutory profit of US$0.44, which was an impressive 159% above what the analyst had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 estimate to see what could be in store for next year.

See our latest analysis for StealthGas

Taking into account the latest results, the current consensus, from the solitary analyst covering StealthGas, is for revenues of US$128.8m in 2023, which would reflect a definite 17% reduction in StealthGas' sales over the past 12 months. Statutory earnings per share are expected to drop 10% to US$1.01 in the same period. In the lead-up to this report, the analyst had been modelling revenues of US$146.8m and earnings per share (EPS) of US$0.79 in 2023. So there's been quite a change-up of views after the latest results, with the analyst making a serious cut to their revenue forecasts while also granting a massive increase in to the earnings per share numbers.

There's been a 75% lift in the price target to US$7.00, with the analyst signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the StealthGas' past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that StealthGas' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 22% to the end of 2023. This tops off a historical decline of 1.3% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to decline 3.4% annually. While this is interesting, StealthGas', revenues are still expected to shrink next year, and at a faster rate than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around StealthGas' earnings potential next year. Unfortunately they also downgraded their revenue estimates, and our analyst estimate suggests that StealthGas is still expected to perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with StealthGas , and understanding it should be part of your investment process.

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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.

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