Limbach Holdings, Inc. (NASDAQ:LMB) just released its latest quarterly results and things are looking bullish. Limbach Holdings delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$164m, some 15% above indicated. Statutory EPS were US$0.31, an impressive 244% ahead of forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.
Following last week's earnings report, Limbach Holdings' one analyst are forecasting 2021 revenues to be US$580.5m, approximately in line with the last 12 months. Statutory earnings per share are predicted to ascend 11% to US$0.86. Before this earnings report, the analyst had been forecasting revenues of US$545.0m and earnings per share (EPS) of US$1.02 in 2021. While next year's revenue estimates increased, there was also a real cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
Curiously, the consensus price target rose 131% to US$15.00. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Limbach Holdings' revenue growth is expected to slow, with forecast 0.7% increase next year well below the historical 11%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.1% next year. Factoring in the forecast slowdown in growth, it seems obvious that Limbach Holdings is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.
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 analyst estimates for Limbach Holdings going out as far as 2021, 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 5 warning signs for Limbach Holdings (1 makes us a bit uncomfortable!) that you need to be mindful of.
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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