Natural Gas Services Group, Inc. (NYSE:NGS) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of US$61m beat forecasts by 11%, although statutory earnings per share disappointed slightly, coming in 2.3% below expectations at US$0.43. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Natural Gas Services Group's three analysts is for revenues of US$252.5m in 2027. This reflects a huge 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 40% to US$2.20. In the lead-up to this report, the analysts had been modelling revenues of US$252.3m and earnings per share (EPS) of US$2.54 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
View our latest analysis for Natural Gas Services Group
It might be a surprise to learn that the consensus price target was broadly unchanged at US$53.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Natural Gas Services Group analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$48.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Natural Gas Services Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Natural Gas Services Group's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.5% per year. Even after the forecast slowdown in growth, it seems obvious that Natural Gas Services Group is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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 Natural Gas Services Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Natural Gas Services Group going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - Natural Gas Services Group has 2 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.