As you might know, Hub Group, Inc. (NASDAQ:HUBG) just kicked off its latest third-quarter results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 5.2% to hit US$925m. Hub Group reported statutory earnings per share (EPS) US$0.74, which was a notable 15% above what the analysts had 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Hub Group's 14 analysts are now forecasting revenues of US$3.71b in 2021. This would be a credible 7.6% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 37% to US$3.17. Before this earnings report, the analysts had been forecasting revenues of US$3.65b and earnings per share (EPS) of US$3.12 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$57.69, showing that the business is executing well and in line with expectations. 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 Hub Group, with the most bullish analyst valuing it at US$72.00 and the most bearish at US$44.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hub Group's past performance and to peers in the same industry. The analysts are definitely expecting Hub Group's growth to accelerate, with the forecast 7.6% growth ranking favourably alongside historical growth of 1.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% next year. Hub Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Hub Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Hub Group going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Hub Group that you should be aware 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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