Results: Astec Industries, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Shareholders of Astec Industries, Inc. (NASDAQ:ASTE) will be pleased this week, given that the stock price is up 16% to US$40.70 following its latest full-year results. Revenues were US$1.3b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.47 were also better than expected, beating analyst predictions by 14%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Astec Industries after the latest results.
Check out our latest analysis for Astec Industries
Taking into account the latest results, Astec Industries' four analysts currently expect revenues in 2024 to be US$1.34b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 21% to US$1.78. Before this earnings report, the analysts had been forecasting revenues of US$1.37b and earnings per share (EPS) of US$1.94 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at US$45.67, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Astec Industries, with the most bullish analyst valuing it at US$53.00 and the most bearish at US$37.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's pretty clear that there is an expectation that Astec Industries' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.4% growth on an annualised basis. This is compared to a historical growth rate of 3.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Astec Industries.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Astec Industries. 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 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 Astec Industries. 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 Astec Industries going out to 2025, and you can see them free on our platform here..
You can also see whether Astec Industries is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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.
