Shareholders might have noticed that H2O America (NASDAQ:HTO) filed its quarterly result this time last week. The early response was not positive, with shares down 2.1% to US$48.29 in the past week. Results overall were respectable, with statutory earnings of US$0.71 per share roughly in line with what the analysts had forecast. Revenues of US$198m came in 5.8% 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on H2O America after the latest results.
Taking into account the latest results, H2O America's four analysts currently expect revenues in 2025 to be US$789.3m, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 2.0% to US$2.97. In the lead-up to this report, the analysts had been modelling revenues of US$787.3m and earnings per share (EPS) of US$2.97 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for H2O America
The analysts reconfirmed their price target of US$61.00, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on H2O America, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$58.00 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the H2O America's past performance and to peers in the same industry. It's pretty clear that there is an expectation that H2O America's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.1% growth on an annualised basis. This is compared to a historical growth rate of 7.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that H2O America is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for H2O America going out to 2027, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for H2O America (1 is a bit concerning!) that you need to take into consideration.
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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.