Yahoo Finance Earnings Beat: Arcosa, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
A week ago, Arcosa, Inc. (NYSE:ACA) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 3.2% to hit US$599m. Arcosa also reported a statutory profit of US$0.80, which was an impressive 58% above what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Arcosa
Taking into account the latest results, the current consensus from Arcosa's four analysts is for revenues of US$2.58b in 2024. This would reflect a meaningful 9.4% increase on its revenue over the past 12 months. Per-share earnings are expected to expand 13% to US$3.30. Before this earnings report, the analysts had been forecasting revenues of US$2.55b and earnings per share (EPS) of US$3.26 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to US$95.75. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Arcosa at US$103 per share, while the most bearish prices it at US$90.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Arcosa's growth to accelerate, with the forecast 13% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Arcosa to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Arcosa going out to 2025, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Arcosa 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.
