Monadelphous Group Limited Just Missed Earnings - But Analysts Have Updated Their Models

Monadelphous Group Limited (ASX:MND) came out with its half-yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Monadelphous Group beat revenue expectations by 3.3%, at AU$1.0b. Statutory earnings per share (EPS) came in at AU$0.31, some 8.4% short of analyst estimates. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Monadelphous Group

Taking into account the latest results, the most recent consensus for Monadelphous Group from twelve analysts is for revenues of AU$2.02b in 2024. If met, it would imply a notable 10.0% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 13% to AU$0.63. Before this earnings report, the analysts had been forecasting revenues of AU$2.03b and earnings per share (EPS) of AU$0.65 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 small dip in their earnings per share forecasts.

The consensus price target held steady at AU$14.69, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Monadelphous Group, with the most bullish analyst valuing it at AU$16.29 and the most bearish at AU$12.30 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 clear from the latest estimates that Monadelphous Group's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.1% p.a. 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 6.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Monadelphous Group to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Monadelphous Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Monadelphous Group analysts - 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 Monadelphous Group 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.