Yahoo Finance MYR Group Inc. (NASDAQ:MYRG) Just Reported And Analysts Have Been Cutting Their Estimates
The analysts might have been a bit too bullish on MYR Group Inc. (NASDAQ:MYRG), given that the company fell short of expectations when it released its first-quarter results last week. MYR Group missed analyst forecasts, with revenues of US$816m and statutory earnings per share (EPS) of US$1.12, falling short by 4.5% and 2.4% respectively. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for MYR Group
Taking into account the latest results, MYR Group's five analysts currently expect revenues in 2024 to be US$3.71b, approximately in line with the last 12 months. Statutory earnings per share are predicted to climb 11% to US$5.74. Before this earnings report, the analysts had been forecasting revenues of US$3.91b and earnings per share (EPS) of US$6.41 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The analysts made no major changes to their price target of US$176, suggesting the downgrades are not expected to have a long-term impact on MYR Group'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. The most optimistic MYR Group analyst has a price target of US$188 per share, while the most pessimistic values it at US$165. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that MYR Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 15% 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 7.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than MYR Group.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on MYR Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple MYR Group analysts - going out to 2026, 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 1 warning sign for MYR 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.
