Shareholders will be ecstatic, with their stake up 25% over the past week following Endeavour Silver Corp.‘s (TSE:EDR) latest quarterly 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Endeavour Silver after the latest results.
See our latest analysis for Endeavour Silver
Taking into account the latest results, the consensus forecast from Endeavour Silver’s two analysts is for revenues of US$229.5m in 2024. This reflects a credible 7.4% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Endeavour Silver forecast to report a statutory profit of US$0.04 per share. Yet prior to the latest earnings, the analysts had been anticipated 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 large cut 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it’s pretty clear that, while Endeavour Silver’s revenue growth is expected to slow, it’s expected to grow roughly in line with the 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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
Even so, be aware that Endeavour Silver is showing 1 warning sign in our investment analysis , you should know about…
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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.