Yahoo Finance Exponent, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Exponent, Inc. (NASDAQ:EXPO) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. The company beat forecasts, with revenue of US$137m, some 8.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.59, 27% ahead of expectations. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Exponent
Taking into account the latest results, Exponent's three analysts currently expect revenues in 2024 to be US$509.4m, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 3.4% to US$1.93 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$488.1m and earnings per share (EPS) of US$1.79 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for Exponent 6.2% to US$94.00on the back of these upgrades. 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. The most optimistic Exponent analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$88.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 Exponent's revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2024 being well below the historical 7.0% 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 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Exponent is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Exponent's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Exponent going out to 2026, and you can see them free on our platform here.
We also provide an overview of the Exponent Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.
