Investors in Saia, Inc. (NASDAQ:SAIA) had a good week, as its shares rose 3.2% to close at US$94.51 following the release of its full-year results. It was a credible result overall, with revenues of US$1.8b and statutory earnings per share of US$4.30 both in line with analyst estimates, showing that Saia is executing in line with expectations. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Saia after the latest results.
Taking into account the latest results, the current consensus from Saia's eight analysts is for revenues of US$1.94b in 2020, which would reflect a notable 8.4% increase on its sales over the past 12 months. Statutory earnings per share are expected to swell 16% to US$5.08. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.90b and earnings per share (EPS) of US$5.14 in 2020. There doesn't appear to have been a major change in analyst sentiment following the results, other than the small increase to revenue estimates.
It may not be a surprise to see that analysts have reconfirmed their price target of US$101, implying that the uplift in sales is not expected to greatly contribute to Saia's valuation in the near term. 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. There are some variant perceptions on Saia, with the most bullish analyst valuing it at US$114 and the most bearish at US$69.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Saia's performance in recent years. We can infer from the latest estimates that analysts are expecting a continuation of Saia's historical trends, as next year's forecast 8.4% revenue growth is roughly in line with 8.5% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.3% per year. So it's pretty clear that Saia is forecast to grow substantially faster than its market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Saia going out to 2021, and you can see them free on our platform here..
You can also view our analysis of Saia's balance sheet, and whether we think Saia is carrying too much debt, for free on our platform here.
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