Enviva Inc. (NYSE:EVA) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

As you might know, Enviva Inc. (NYSE:EVA) recently reported its quarterly numbers. The results don't look great, especially considering that statutory losses grew 83% toUS$0.42 per share. Revenues of US$296m did beat expectations by 5.6%, but it looks like a bit of a cold comfort. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Enviva

Following the latest results, Enviva's six analysts are now forecasting revenues of US$1.24b in 2022. This would be a decent 19% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 83% to US$0.38. Before this latest report, the consensus had been expecting revenues of US$1.24b and US$0.38 per share in losses.

The consensus price target was unchanged at US$81.20, suggesting that the business - losses and all - is executing in line with estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Enviva at US$100.00 per share, while the most bearish prices it at US$71.00. 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 Enviva shareholders.

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 clear from the latest estimates that Enviva's rate of growth is expected to accelerate meaningfully, with the forecast 42% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 5.3% annually. It seems obvious that as part of the brighter growth outlook, Enviva is expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations. Their estimates also suggest that Enviva's revenues are expected to perform better than the wider industry. The consensus price target held steady at US$81.20, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Enviva. Long-term earnings power is much more important than next year's profits. We have forecasts for Enviva going out to 2024, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Enviva (including 2 which can't be ignored) .

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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.

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