Northwest Pipe Company Just Beat EPS By 5.9%: Here's What Analysts Think Will Happen Next
It's been a pretty great week for Northwest Pipe Company (NASDAQ:NWPX) shareholders, with its shares surging 14% to US$33.91 in the week since its latest full-year results. The result was positive overall - although revenues of US$444m were in line with what the analysts predicted, Northwest Pipe surprised by delivering a statutory profit of US$2.09 per share, modestly greater than expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Northwest Pipe
Taking into account the latest results, the most recent consensus for Northwest Pipe from three analysts is for revenues of US$460.3m in 2024. If met, it would imply a satisfactory 3.6% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 8.6% to US$2.31. In the lead-up to this report, the analysts had been modelling revenues of US$455.4m and earnings per share (EPS) of US$2.29 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 7.8% to US$41.33despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Northwest Pipe's 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 Northwest Pipe analyst has a price target of US$44.00 per share, while the most pessimistic values it at US$40.00. This is a very narrow spread of estimates, implying either that Northwest Pipe is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Northwest Pipe's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% 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 Northwest Pipe.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Northwest Pipe. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Northwest Pipe going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Northwest Pipe that you should be aware of.
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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.
