Yahoo Finance Reservoir Media, Inc. Just Beat EPS By 75%: Here's What Analysts Think Will Happen Next
Reservoir Media, Inc. (NASDAQ:RSVR) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$33m, while EPS were US$0.07 beating analyst models by 75%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Reservoir Media
Taking into account the latest results, the current consensus from Reservoir Media's twin analysts is for revenues of US$120.9m in 2023, which would reflect an okay 2.0% increase on its sales over the past 12 months. Statutory earnings per share are expected to nosedive 22% to US$0.17 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$119.4m and earnings per share (EPS) of US$0.16 in 2023. So the consensus seems to have become somewhat more optimistic on Reservoir Media's earnings potential following these results.
The consensus price target was unchanged at US$13.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.
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 Reservoir Media's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 4.1% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Reservoir Media is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Reservoir Media following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Reservoir Media's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$13.00, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
Before you take the next step you should know about the 2 warning signs for Reservoir Media that we have uncovered.
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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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