Arabian Drilling Company Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year
Shareholders of Arabian Drilling Company (TADAWUL:2381) will be pleased this week, given that the stock price is up 11% to ر.س103 following its latest third-quarter results. Revenues were ر.س811m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at ر.س0.35, an impressive 20% ahead of estimates. 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.
Taking into account the latest results, the consensus forecast from Arabian Drilling's nine analysts is for revenues of ر.س4.26b in 2027. This reflects a major 32% improvement in revenue compared to the last 12 months. Arabian Drilling is also expected to turn profitable, with statutory earnings of ر.س4.79 per share. In the lead-up to this report, the analysts had been modelling revenues of ر.س4.17b and earnings per share (EPS) of ر.س4.91 in 2027. So it's pretty clear consensus is mixed on Arabian Drilling after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.
Check out our latest analysis for Arabian Drilling
The consensus price target was unchanged at ر.س105, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Arabian Drilling, with the most bullish analyst valuing it at ر.س121 and the most bearish at ر.س93.40 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. The analysts are definitely expecting Arabian Drilling's growth to accelerate, with the forecast 25% annualised growth to the end of 2027 ranking favourably alongside historical growth of 6.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Arabian Drilling is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Arabian Drilling. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at ر.س105, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for Arabian Drilling going out to 2028, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Arabian Drilling you should be aware of.
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