Investors in Exponent, Inc. (NASDAQ:EXPO) had a good week, as its shares rose 7.7% to close at US$78.38 following the release of its annual results. The result was positive overall - although revenues of US$391m were in line with what analysts predicted, Exponent surprised by delivering a statutory profit of US$1.53 per share, modestly greater than expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the current consensus from Exponent's six analysts is for revenues of US$413.2m in 2020, which would reflect an okay 5.6% increase on its sales over the past 12 months. Statutory earnings per share are expected to rise 3.0% to US$1.61. Yet prior to the latest earnings, analysts had been forecasting revenues of US$416.5m and earnings per share (EPS) of US$1.59 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$76.00, showing that the business is executing well and in line with expectations. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Exponent, with the most bullish analyst valuing it at US$84.00 and the most bearish at US$65.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Exponent's performance in recent years. We can infer from the latest estimates that analysts are expecting a continuation of Exponent's historical trends, as next year's forecast 5.6% revenue growth is roughly in line with 6.1% annual revenue growth over the past five years. Compare this with the wider market (in aggregate), which analyst estimates suggest will see revenues fall 6.8% next year. So it's pretty clear that Exponent is expected to grow slower than similar companies in the same market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$76.00, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Exponent going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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