Boyd Group Services Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Boyd Group Services Inc. (TSE:BYD) shareholders are probably feeling a little disappointed, since its shares fell 3.1% to CA$220 in the week after its latest quarterly results. Revenues were in line with forecasts, at US$779m, although statutory earnings per share came in 11% below what the analysts expected, at US$0.50 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Boyd Group Services after the latest results.

See our latest analysis for Boyd Group Services

Taking into account the latest results, the current consensus from Boyd Group Services' twelve analysts is for revenues of US$3.11b in 2024. This would reflect a credible 2.2% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to crater 31% to US$1.88 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.21b and earnings per share (EPS) of US$3.18 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.7% to CA$287. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Boyd Group Services, with the most bullish analyst valuing it at CA$340 and the most bearish at CA$220 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Boyd Group Services' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.4% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.3% per year. Even after the forecast slowdown in growth, it seems obvious that Boyd Group Services is also expected to grow faster than 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 Boyd Group Services. They also downgraded Boyd Group Services' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Boyd Group Services' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Boyd Group Services going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Boyd Group Services that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.