Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) Analysts Are Pretty Bullish On The Stock After Recent Results
Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The results don't look great, especially considering that statutory losses grew 20% toUS$1.03 per share. Revenues of US$103m did beat expectations by 3.3%, but it looks like a bit of a cold comfort. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Solaris Oilfield Infrastructure
After the latest results, the seven analysts covering Solaris Oilfield Infrastructure are now predicting revenues of US$115.2m in 2021. If met, this would reflect a solid 12% improvement in sales compared to the last 12 months. Solaris Oilfield Infrastructure is also expected to turn profitable, with statutory earnings of US$0.02 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$113.3m and earnings per share (EPS) of US$0.02 in 2021. 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.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.5% to US$11.15. It looks as though they previously had some doubts over whether the business would live up to their 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. The most optimistic Solaris Oilfield Infrastructure analyst has a price target of US$12.50 per share, while the most pessimistic values it at US$8.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Solaris Oilfield Infrastructure's revenue growth is expected to slow, with forecast 12% increase next year well below the historical 37%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.2% next year. Even after the forecast slowdown in growth, it seems obvious that Solaris Oilfield Infrastructure is also expected 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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Solaris Oilfield Infrastructure. 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 Solaris Oilfield Infrastructure going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for Solaris Oilfield Infrastructure (1 is potentially serious!) that you need to take into consideration.
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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