Yahoo Finance Analysts Have Been Trimming Their Custom Truck One Source, Inc. (NYSE:CTOS) Price Target After Its Latest Report
It's shaping up to be a tough period for Custom Truck One Source, Inc. (NYSE:CTOS), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It was a pretty negative result overall, with revenues of US$411m missing analyst predictions by 9.8%. Worse, the business reported a statutory loss of US$0.06 per share, much larger than the analysts had forecast prior to the result. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Custom Truck One Source
Taking into account the latest results, the consensus forecast from Custom Truck One Source's six analysts is for revenues of US$2.05b in 2024. This reflects a meaningful 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 130% to US$0.22. In the lead-up to this report, the analysts had been modelling revenues of US$2.08b and earnings per share (EPS) of US$0.29 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
The average price target fell 5.7% to US$8.33, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Custom Truck One Source at US$12.00 per share, while the most bearish prices it at US$6.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's pretty clear that there is an expectation that Custom Truck One Source's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 43% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% annually. So it's pretty clear that, while Custom Truck One Source's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Custom Truck One Source. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Custom Truck One Source's future valuation.
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. At Simply Wall St, we have a full range of analyst estimates for Custom Truck One Source going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 3 warning signs for Custom Truck One Source (1 shouldn't be ignored!) that we have uncovered.
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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.
