H&E Equipment Services, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
H&E Equipment Services, Inc. (NASDAQ:HEES) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. H&E Equipment Services reported US$1.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$4.66 beat expectations, being 7.0% higher than what the analysts expected. 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.
See our latest analysis for H&E Equipment Services
Taking into account the latest results, the most recent consensus for H&E Equipment Services from four analysts is for revenues of US$1.58b in 2024. If met, it would imply a reasonable 7.7% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$4.65, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$1.59b and earnings per share (EPS) of US$4.72 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 6.9% to US$66.83despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of H&E Equipment Services' earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic H&E Equipment Services analyst has a price target of US$75.00 per share, while the most pessimistic values it at US$60.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that H&E Equipment Services' rate of growth is expected to accelerate meaningfully, with the forecast 7.7% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that H&E Equipment Services is expected to grow much faster than its industry.
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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on H&E Equipment Services. Long-term earnings power is much more important than next year's profits. We have forecasts for H&E Equipment Services going out to 2025, and you can see them free on our platform here.
Even so, be aware that H&E Equipment Services is showing 2 warning signs in our investment analysis , you should know about...
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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.
