Yahoo Finance Earnings Update: Here's Why Analysts Just Lifted Their Orion Group Holdings, Inc. (NYSE:ORN) Price Target To US$9.83
Shareholders might have noticed that Orion Group Holdings, Inc. (NYSE:ORN) filed its first-quarter result this time last week. The early response was not positive, with shares down 6.7% to US$7.34 in the past week. Revenues of US$161m came in 8.1% below estimates, but statutory losses were slightly better than expected, at US$0.19 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Orion Group Holdings
Following the latest results, Orion Group Holdings' four analysts are now forecasting revenues of US$870.0m in 2024. This would be a huge 22% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Orion Group Holdings forecast to report a statutory profit of US$0.10 per share. In the lead-up to this report, the analysts had been modelling revenues of US$872.4m and earnings per share (EPS) of US$0.12 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.
Despite cutting their earnings forecasts,the analysts have lifted their price target 16% to US$9.83, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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 Orion Group Holdings at US$10.00 per share, while the most bearish prices it at US$9.50. This is a very narrow spread of estimates, implying either that Orion Group Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. It's clear from the latest estimates that Orion Group Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Orion Group Holdings to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Orion Group Holdings. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Orion Group Holdings going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Orion Group Holdings (of which 1 is concerning!) you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
