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A week ago, Natural Gas Services Group, Inc. (NYSE:NGS) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 2.1% to hit US$41m. Natural Gas Services Group also reported a statutory profit of US$0.38, which was an impressive 52% above what the analysts had forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
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Taking into account the latest results, the most recent consensus for Natural Gas Services Group from three analysts is for revenues of US$176.2m in 2025. If met, it would imply a meaningful 9.3% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 4.5% to US$1.42. Before this earnings report, the analysts had been forecasting revenues of US$175.1m and earnings per share (EPS) of US$1.21 in 2025. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
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There's been no major changes to the consensus price target of US$36.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Natural Gas Services Group analyst has a price target of US$45.00 per share, while the most pessimistic values it at US$32.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Natural Gas Services Group shareholders.
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 Natural Gas Services Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 19% 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) 2.9% per year. So it's pretty clear that, while Natural Gas Services Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.