It's been a good week for Energy Recovery, Inc. (NASDAQ:ERII) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.0% to US$18.53. Revenues were US$39m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.15, an impressive 150% ahead of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Energy Recovery

Following the latest results, Energy Recovery's four analysts are now forecasting revenues of US$172.8m in 2025. This would be a huge 28% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 67% to US$0.56. Before this earnings report, the analysts had been forecasting revenues of US$173.7m and earnings per share (EPS) of US$0.56 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.

The analysts reconfirmed their price target of US$20.50, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Energy Recovery analyst has a price target of US$23.00 per share, while the most pessimistic values it at US$16.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Energy Recovery's growth to accelerate, with the forecast 22% annualised growth to the end of 2025 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 3.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Energy Recovery to grow faster than the wider industry.

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. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Energy Recovery analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Energy Recovery that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.