Results: Werner Enterprises, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts
Werner Enterprises, Inc. (NASDAQ:WERN) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The result was positive overall - although revenues of US$616m were in line with what the analysts predicted, Werner Enterprises surprised by delivering a statutory profit of US$0.68 per share, modestly greater than 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Werner Enterprises
Taking into account the latest results, the most recent consensus for Werner Enterprises from 13 analysts is for revenues of US$2.60b in 2021 which, if met, would be a decent 8.5% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 20% to US$3.35. Before this earnings report, the analysts had been forecasting revenues of US$2.55b and earnings per share (EPS) of US$3.21 in 2021. So the consensus seems to have become somewhat more optimistic on Werner Enterprises' earnings potential following these results.
There's been no major changes to the consensus price target of US$50.19, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Werner Enterprises, with the most bullish analyst valuing it at US$56.00 and the most bearish at US$38.00 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.
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. The analysts are definitely expecting Werner Enterprises' growth to accelerate, with the forecast 12% annualised growth to the end of 2021 ranking favourably alongside historical growth of 4.6% per annum 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 8.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Werner Enterprises is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Werner Enterprises' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Werner Enterprises going out to 2023, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Werner Enterprises , and understanding it should be part of your investment process.
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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