It's been a pretty great week for Civeo Corporation (NYSE:CVEO) shareholders, with its shares surging 14% to US$0.73 in the week since its latest third-quarter results. Revenues beat expectations by 24%, and sales of US$143m were sufficient to generate a statutory profit of US$0.03 - a pleasant surprise given that the analysts were forecasting a loss! 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Civeo's twin analysts currently expect revenues in 2021 to be US$545.2m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 91% to US$0.085. Before this latest report, the consensus had been expecting revenues of US$500.1m and US$0.09 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.
It will come as no surprise to learn thatthe analysts have increased their price target for Civeo 7.1% to US$1.88on the back of these upgrades.
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 pretty clear that there is an expectation that Civeo's revenue growth will slow down substantially, with revenues next year expected to grow 0.03%, compared to a historical growth rate of 3.1% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Civeo is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Civeo going out as far as 2022, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Civeo that you should be aware of.
This article by Simply Wall St is general in nature. 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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