Shenandoah Telecommunications Company (NASDAQ:SHEN) Just Reported And Analysts Have Been Lifting Their Price Targets
Last week saw the newest third-quarter earnings release from Shenandoah Telecommunications Company (NASDAQ:SHEN), an important milestone in the company's journey to build a stronger business. It was a respectable set of results; while revenues of US$94m were in line with analyst predictions, statutory losses were 17% smaller than expected, with Shenandoah Telecommunications losing US$0.19 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the two analysts covering Shenandoah Telecommunications are now predicting revenues of US$394.3m in 2027. If met, this would reflect a satisfactory 6.2% improvement in revenue compared to the last 12 months. Losses are forecast to narrow 8.1% to US$0.74 per share. Before this latest report, the consensus had been expecting revenues of US$394.2m and US$0.65 per share in losses. While next year's revenue estimates held steady, there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
View our latest analysis for Shenandoah Telecommunications
Despite expectations of heavier losses next year,the analysts have lifted their price target 25% to US$27.50, perhaps implying these losses are not expected to be recurring over the long term.
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. We would highlight that Shenandoah Telecommunications' revenue growth is expected to slow, with the forecast 5.0% annualised growth rate until the end of 2027 being well below the historical 9.8% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 41% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Shenandoah Telecommunications.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Shenandoah Telecommunications. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Shenandoah Telecommunications' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Shenandoah Telecommunications going out as far as 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Shenandoah Telecommunications that you should be aware of.
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