Independence Contract Drilling, Inc. (NYSE:ICD) just released its latest first-quarter results and things are looking bullish. Independence Contract Drilling outperformed estimates, with revenues of US$47m beating estimates by 12%. Statutory losses were US$0.62, 32% smaller thanthe analysts expected. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus, from the twin analysts covering Independence Contract Drilling, is for revenues of US$180.1m in 2024. This implies a discernible 6.7% reduction in Independence Contract Drilling's revenue over the past 12 months. Losses are expected to hold steady at around US$3.07. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$180.9m and losses of US$3.01 per share in 2024. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although revenue forecasts held steady, the consensus also made a modest increase to its losses per share forecasts.
The consensus price target held steady at US$4.50, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Independence Contract Drilling's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 8.8% annualised decline to the end of 2024. That is a notable change from historical growth of 4.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Independence Contract Drilling is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Independence Contract Drilling. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Independence Contract Drilling going out as far as 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Independence Contract Drilling has 3 warning signs we think you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.