The investors in Endeavour Silver Corp.'s (TSE:EDR) will be rubbing their hands together with glee today, after the share price leapt 25% to CA$4.53 in the week following its first-quarter results. It was a pretty good result, with revenues of US$64m, and Endeavour Silver came in a solid 18% ahead of expectations. 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.

See our latest analysis for Endeavour Silver

Taking into account the latest results, the most recent consensus for Endeavour Silver from two analysts is for revenues of US$229.5m in 2024. If met, it would imply a credible 7.4% increase on its revenue over the past 12 months. Endeavour Silver is also expected to turn profitable, with statutory earnings of US$0.04 per share. Before this earnings report, the analysts had been forecasting revenues of US$234.8m and earnings per share (EPS) of US$0.065 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

What's most unexpected is that the consensus price target rose 11% to CA$4.88, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Endeavour Silver's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 10.0% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this to the 1236 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it looks like Endeavour Silver is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Endeavour Silver. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Endeavour Silver going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Endeavour Silver that you need to take into consideration.

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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.