One thing we could say about the analysts on Montauk Renewables, Inc. (NASDAQ:MNTK) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After this downgrade, Montauk Renewables' two analysts are now forecasting revenues of US$180m in 2025. This would be a modest 2.2% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 4.3% to US$0.072. Prior to this update, the analysts had been forecasting revenues of US$238m and earnings per share (EPS) of US$0.24 in 2025. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Montauk Renewables

The consensus price target fell 20% to US$4.25, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Montauk Renewables' revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Montauk Renewables is also expected to grow slower than other industry participants.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Montauk Renewables. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Montauk Renewables' revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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