This Analyst Just Made A Massive Upgrade To Their Radiant Logistics, Inc. (NYSEMKT:RLGT) Earnings Forecasts
Celebrations may be in order for Radiant Logistics, Inc. (NYSEMKT:RLGT) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. Investors have been pretty optimistic on Radiant Logistics too, with the stock up 16% to US$7.45 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following the latest upgrade, the current consensus, from the solo analyst covering Radiant Logistics, is for revenues of US$792m in 2021, which would reflect a noticeable 6.5% reduction in Radiant Logistics' sales over the past 12 months. Per-share earnings are expected to ascend 15% to US$0.27. Previously, the analyst had been modelling revenues of US$719m and earnings per share (EPS) of US$0.20 in 2021. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.
See our latest analysis for Radiant Logistics
With these upgrades, we're not surprised to see that the analyst has lifted their price target 17% to US$8.75 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Radiant Logistics, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$8.50 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analyst has a clear view on its prospects.
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 6.5%, a significant reduction from annual growth of 2.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.9% next year. It's pretty clear that Radiant Logistics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, the analyst also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Radiant Logistics.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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. 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.
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