Results: Héroux-Devtek Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

As you might know, Héroux-Devtek Inc. (TSE:HRX) just kicked off its latest quarterly results with some very strong numbers. The company beat forecasts, with revenue of CA$164m, some 9.9% above estimates, and statutory earnings per share (EPS) coming in at CA$0.27, 66% ahead of expectations. 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.

View our latest analysis for Héroux-Devtek

Following the latest results, Héroux-Devtek's five analysts are now forecasting revenues of CA$658.1m in 2025. This would be a meaningful 9.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 47% to CA$1.05. In the lead-up to this report, the analysts had been modelling revenues of CA$635.7m and earnings per share (EPS) of CA$0.98 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 15% to CA$22.80per share. 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 Héroux-Devtek at CA$26.00 per share, while the most bearish prices it at CA$21.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Héroux-Devtek's growth to accelerate, with the forecast 7.4% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Héroux-Devtek is expected to grow at about the same rate as the wider industry.

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 Héroux-Devtek following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Héroux-Devtek will grow in line with the overall 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Héroux-Devtek. Long-term earnings power is much more important than next year's profits. We have forecasts for Héroux-Devtek going out to 2026, 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 Héroux-Devtek , and understanding it should be part of your investment process.

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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.