It's been a pretty great week for Rattler Midstream LP (NASDAQ:RTLR) shareholders, with its shares surging 12% to US$6.58 in the week since its latest quarterly results. Results overall were not great, with earnings of US$0.20 per share falling drastically short of analyst expectations. Meanwhile revenues hit US$97m and were slightly better than forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Rattler Midstream

Following the recent earnings report, the consensus from eleven analysts covering Rattler Midstream is for revenues of US$399.1m in 2021, implying a chunky 13% decline in sales compared to the last 12 months. Per-share earnings are expected to jump 41% to US$1.22. In the lead-up to this report, the analysts had been modelling revenues of US$401.5m and earnings per share (EPS) of US$1.16 in 2021. So the consensus seems to have become somewhat more optimistic on Rattler Midstream's earnings potential following these results.

The consensus price target was unchanged at US$9.31, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Rattler Midstream at US$13.00 per share, while the most bearish prices it at US$6.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 sales are expected to reverse, with the forecast 13% revenue decline a notable change from historical growth of 49% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Rattler Midstream is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Rattler Midstream's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Rattler Midstream's revenues are expected to 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.