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Market forces rained on the parade of Atlas Energy Solutions Inc. (NYSE:AESI) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. At US$13.36, shares are up 6.2% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
After the downgrade, the seven analysts covering Atlas Energy Solutions are now predicting revenues of US$1.2b in 2025. If met, this would reflect a satisfactory 2.4% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 353% to US$1.26. Before this latest update, the analysts had been forecasting revenues of US$1.3b and earnings per share (EPS) of US$1.57 in 2025. Indeed, we can see that the analysts are a lot more bearish about Atlas Energy Solutions' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Atlas Energy Solutions
The consensus price target fell 15% to US$18.33, with the weaker earnings outlook clearly leading analyst valuation estimates.
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 Atlas Energy Solutions' revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2025 being well below the historical 44% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.9% annually. Factoring in the forecast slowdown in growth, it looks like Atlas Energy Solutions is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Atlas Energy Solutions. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Atlas Energy Solutions going forwards.