Yahoo Finance NFI Group Inc. (TSE:NFI) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates
Shareholders of NFI Group Inc. (TSE:NFI) will be pleased this week, given that the stock price is up 16% to CA$12.88 following its latest quarterly results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 7.7%to hit US$723m. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 NFI Group
Taking into account the latest results, the current consensus from NFI Group's five analysts is for revenues of US$3.39b in 2024. This would reflect a notable 18% increase on its revenue over the past 12 months. Earnings are expected to improve, with NFI Group forecast to report a statutory profit of US$0.65 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.40b and earnings per share (EPS) of US$0.45 in 2024. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of CA$15.70, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on NFI Group, with the most bullish analyst valuing it at CA$18.99 and the most bearish at CA$12.11 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes 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. For example, we noticed that NFI Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 24% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.3% annually. Not only are NFI Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NFI Group's earnings potential next year. 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. The consensus price target held steady at CA$15.70, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on NFI Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for NFI Group going out to 2025, 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 2 warning signs for NFI Group that you need to be mindful of.
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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.