Thor Explorations Ltd. Beat Revenue Forecasts By 5.6%: Here's What Analysts Are Forecasting Next

It's been a sad week for Thor Explorations Ltd. (CVE:THX), who've watched their investment drop 10% to CA$0.30 in the week since the company reported its second-quarter result. Results overall were respectable, with statutory earnings of US$0.039 per share roughly in line with what the analysts had forecast. Revenues of US$42m came in 5.6% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Thor Explorations

Following the recent earnings report, the consensus from four analysts covering Thor Explorations is for revenues of US$153.4m in 2023. This implies a definite 15% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to nosedive 54% to US$0.019 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$167.9m and earnings per share (EPS) of US$0.02 in 2023. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of CA$0.64, suggesting the downgrades are not expected to have a long-term impact on Thor Explorations' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Thor Explorations at CA$0.75 per share, while the most bearish prices it at CA$0.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 revenue is expected to reverse, with a forecast 28% annualised decline to the end of 2023. That is a notable change from historical growth of 89% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Thor Explorations is expected to lag the wider 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Thor Explorations going out to 2025, 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 Thor Explorations you should be aware of.

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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.