Shareholders of Kodiak Gas Services, Inc. (NYSE:KGS) will be pleased this week, given that the stock price is up 12% to US$34.83 following its latest quarterly results. Revenues of US$325m beat expectations by 2.5%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.07 compared to previous analyst expectations of a profit. 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.

Taking into account the latest results, the consensus forecast from Kodiak Gas Services' eight analysts is for revenues of US$1.35b in 2025. This reflects a major 25% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 606% to US$1.82. Before this earnings report, the analysts had been forecasting revenues of US$1.34b and earnings per share (EPS) of US$1.73 in 2025. So the consensus seems to have become somewhat more optimistic on Kodiak Gas Services' earnings potential following these results.

The consensus price target was unchanged at US$33.60, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Kodiak Gas Services, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$31.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 can infer from the latest estimates that forecasts expect a continuation of Kodiak Gas Services'historical trends, as the 20% annualised revenue growth to the end of 2025 is roughly in line with the 20% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.5% per year. So it's pretty clear that Kodiak Gas Services is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kodiak Gas Services following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. 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.

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 Kodiak Gas Services going out to 2026, and you can see them free on our platform here.

Even so, be aware that Kodiak Gas Services is showing 5 warning signs in our investment analysis , and 2 of those are a bit concerning...

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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.