Werner Enterprises, Inc. Just Missed EPS By 6.0%: Here's What Analysts Think Will Happen Next
It's been a good week for Werner Enterprises, Inc. (NASDAQ:WERN) shareholders, because the company has just released its latest yearly results, and the shares gained 5.1% to US$41.49. It looks like the results were a bit of a negative overall. While revenues of US$3.3b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.0% to hit US$1.76 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Werner Enterprises after the latest results.
See our latest analysis for Werner Enterprises
Following last week's earnings report, Werner Enterprises' 13 analysts are forecasting 2024 revenues to be US$3.28b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 9.0% to US$1.93. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.40b and earnings per share (EPS) of US$2.37 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
The analysts made no major changes to their price target of US$43.75, suggesting the downgrades are not expected to have a long-term impact on Werner Enterprises' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Werner Enterprises analyst has a price target of US$59.00 per share, while the most pessimistic values it at US$36.00. 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.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.1% by the end of 2024. This indicates a significant reduction from annual growth of 8.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Werner Enterprises is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Werner Enterprises. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$43.75, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Werner Enterprises going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Werner Enterprises you should know about.
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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.
