Earnings Update: Exponent, Inc. (NASDAQ:EXPO) Just Reported And Analysts Are Trimming Their Forecasts
There's been a notable change in appetite for Exponent, Inc. (NASDAQ:EXPO) shares in the week since its annual report, with the stock down 12% to US$78.39. Results were roughly in line with estimates, with revenues of US$497m and statutory earnings per share of US$1.94. This is an important time for investors, as they can track a company's performance in its report, look at what experts are 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 analysts are expecting for next year.
View our latest analysis for Exponent
Following last week's earnings report, Exponent's three analysts are forecasting 2024 revenues to be US$506.1m, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 11% to US$1.77 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$541.5m and earnings per share (EPS) of US$2.16 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 7.5% to US$93.00. 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 Exponent analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$91.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Exponent is an easy business to forecast or the the analysts are all using similar assumptions.
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. It's pretty clear that there is an expectation that Exponent's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 7.0% 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 6.4% 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 Exponent.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Exponent. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 estimates - from multiple Exponent analysts - going out to 2025, 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.
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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.
