Shareholders of Aris Water Solutions, Inc. (NYSE:ARIS) will be pleased this week, given that the stock price is up 19% to US$31.46 following its latest full-year results. It was not a great result overall. Although revenues beat expectations, hitting US$435m, statutory earnings missed analyst forecasts by 19%, coming in at just US$0.81 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Aris Water Solutions

Taking into account the latest results, the most recent consensus for Aris Water Solutions from six analysts is for revenues of US$498.1m in 2025. If met, it would imply a solid 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 55% to US$1.25. Before this earnings report, the analysts had been forecasting revenues of US$458.9m and earnings per share (EPS) of US$1.22 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$28.45, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic Aris Water Solutions analyst has a price target of US$34.00 per share, while the most pessimistic values it at US$23.00. 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.

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. We would highlight that Aris Water Solutions' revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 23% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% annually. So it's pretty clear that, while Aris Water Solutions' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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 Aris Water Solutions following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$28.45, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Aris Water Solutions. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Aris Water Solutions analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Aris Water Solutions has 2 warning signs (and 1 which is concerning) we think you should know about.

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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.