As you might know, Forward Air Corporation (NASDAQ:FWRD) recently reported its quarterly numbers. It looks like a credible result overall - although revenues of US$332m were what the analysts expected, Forward Air surprised by delivering a (statutory) profit of US$0.60 per share, an impressive 79% above what was forecast. 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.
Following the recent earnings report, the consensus from five analysts covering Forward Air is for revenues of US$1.37b in 2021, implying a perceptible 4.4% decline in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 27% to US$2.94. In the lead-up to this report, the analysts had been modelling revenues of US$1.36b and earnings per share (EPS) of US$2.85 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$62.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. There are some variant perceptions on Forward Air, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$57.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. We would highlight that sales are expected to reverse, with the forecast 4.4% revenue decline a notable change from historical growth of 9.4% 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 6.2% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Forward Air is expected to lag the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Forward Air following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Forward Air's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$62.00, with the latest estimates not enough to have an impact on their price targets.
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 Forward Air analysts - going out to 2022, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Forward Air you should know about.
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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