Yahoo Finance Primoris Services Corporation Just Recorded A 347% EPS Beat: Here's What Analysts Are Forecasting Next
Investors in Primoris Services Corporation (NYSE:PRIM) had a good week, as its shares rose 6.2% to close at US$50.24 following the release of its quarterly results. It looks like a credible result overall - although revenues of US$1.4b were what the analysts expected, Primoris Services surprised by delivering a (statutory) profit of US$0.35 per share, an impressive 347% above what was forecast. 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.
View our latest analysis for Primoris Services
Following last week's earnings report, Primoris Services' five analysts are forecasting 2024 revenues to be US$5.92b, approximately in line with the last 12 months. Per-share earnings are expected to rise 2.1% to US$2.74. In the lead-up to this report, the analysts had been modelling revenues of US$6.08b and earnings per share (EPS) of US$2.70 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The average price target was steady at US$56.60even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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 Primoris Services at US$63.00 per share, while the most bearish prices it at US$49.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Primoris Services' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Primoris Services.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term 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 Primoris Services. 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 Primoris Services 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 2 warning signs for Primoris Services 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.
