More on the analysts, and markets in generalThe analysts base their targets on things that have already happened.
Very few of them show any true foresight. They're all looking in the rear-view mirror.
How many analysts have incorporated future biostream orders into their revenue forecasts?
How many have incorporated any future recurring revenues from forthcoming infrastructure projects such as Boo?
None.
In fact, they have whined about how Xebec is going to replace the revenues from the recent $140 million contract in 2 years' time, rather than concentrating on the positive effects this contract will have on revenues and margins, and. in the immediate future, its effect on Xebec's soon-to-be-announced newest backlog numbers.
The majority of analysts and people today don't seem to understand that today's news is ancient history for the market.
People think the market can't go up because there's a vicious war going on, supply chains have been seriously disrupted, and interest rates are going higher.
Guess what? This isn't news to the market.
It's already "baked-in" to the market, and with all these ingredients already in the recipe, the market is where it is today.
We often see a company announce better than expected revenues and/or earnings only to see its stock drop significantly.
95% of the time, this happens because the company has issued disappointing guidance.
The market is more reactive to what's going to happen going forward than it is to what has already happened in the past.
The market couldn't care less about the past.
The market knows there's a war going on, it knows interest rates are going higher, and it knows Xebec's latest quarterly numbers.
The market isn't operating in a vacuum.
What the market doesn't know, but can only "surmise" to the best of its ability, is what developments are going to influence Xebec's earnings and margins in the future.
That's a very tall order.
Personally, I don't think the improvement in Xebec's margins that will result from this order have yet even come close to being factored into Xebec's price.
Not even close.
Add to that the fact that Xebec has so many tentacles surrounding the globe and it becomes little more than a guess where the next news comes from.
The stars are aligning for Xebec.
Has the market correctly "baked" biostream sales in Europe into Xebec's current stock price?
Germany alone imports 32% of its gas from Russia.
The recent realization of their vulnerability to oil and gas supply disruptions has forced Europe to re-think their domestic supplies.
This is a major addition to the tailwinds already favoring Xebec that are provided by the climate crisis. and the resultant push for renewable energy and carbon sequestration.
Picture what happened when the boxing-day tsunami hit Phuket, and in fact the world.
In a way, this is an appropriate analogy.
It remains one of the worst natural disasters in history.
At first, the water receded 1,600 feet from the shoreline.
Everyone realized something was wrong.
I compare this to the world waking up to the real threat posed by global warming.
Then came the first wave.
I compare this to the massive inflows of capital we saw in 2020, when renewable energy shares rose exponentially.
Then the waters receded again, but not nearly as much as the first time.
This is the sell-off we've seen in renewables in the last 14 months, none of which has come even close to their 2019 lows.
Then came the second and third waves.
The second and third waves were far more powerful than the first.