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It's been a good week for U.S. Concrete, Inc. (NASDAQ:USCR) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.8% to US$33.96. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$374m, statutory earnings beat expectations by a notable 108%, coming in at US$1.42 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for U.S. Concrete from seven analysts is for revenues of US$1.44b in 2021 which, if met, would be a satisfactory 2.5% increase on its sales over the past 12 months. Statutory earnings per share are expected to tumble 26% to US$1.39 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.44b and earnings per share (EPS) of US$1.21 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the decent improvement in earnings per share expectations following these results.
The consensus price target rose 10% to US$32.94, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values U.S. Concrete at US$39.00 per share, while the most bearish prices it at US$19.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that U.S. Concrete's revenue growth will slow down substantially, with revenues next year expected to grow 2.5%, compared to a historical growth rate of 8.5% 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 4.6% next 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 U.S. Concrete.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards U.S. Concrete following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that U.S. Concrete's revenues are expected to 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.
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. At Simply Wall St, we have a full range of analyst estimates for U.S. Concrete going out to 2024, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we've spotted with U.S. Concrete (including 1 which is a bit concerning) .
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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