Reservoir Media, Inc. (NASDAQ:RSVR) shareholders are probably feeling a little disappointed, since its shares fell 3.5% to US$8.25 in the week after its latest second-quarter results. Revenues of US$41m beat analyst forecasts by5.9%, while the business broke even in terms of statutory earnings per share (EPS). 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Reservoir Media

Following last week's earnings report, Reservoir Media's dual analysts are forecasting 2025 revenues to be US$152.2m, approximately in line with the last 12 months. Reservoir Media is also expected to turn profitable, with statutory earnings of US$0.06 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$151.5m and earnings per share (EPS) of US$0.093 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.0% to US$13.50, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

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 Reservoir Media's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Reservoir Media is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Reservoir Media. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Reservoir Media going out as far as 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Reservoir Media that you need to be mindful of.

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