Bowman Consulting Group Ltd. Just Missed Earnings; Here's What Analysts Are Forecasting Now

One of the biggest stories of last week was how Bowman Consulting Group Ltd. (NASDAQ:BWMN) shares plunged 29% in the week since its latest quarterly results, closing yesterday at US$24.02. Revenues fell 5.0% short of expectations, at US$105m. Earnings correspondingly dipped, with Bowman Consulting Group reporting a statutory loss of US$0.13 per share, whereas the analysts had previously modelled a profit in this period. 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.

Check out our latest analysis for Bowman Consulting Group

Following the latest results, Bowman Consulting Group's six analysts are now forecasting revenues of US$423.4m in 2024. This would be a decent 9.5% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 79% to US$0.12 per share. Before this earnings report, the analysts had been forecasting revenues of US$440.0m and earnings per share (EPS) of US$0.14 in 2024. The analysts have made an abrupt about-face on Bowman Consulting Group, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.

The consensus price target fell 17% to US$35.92, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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 Bowman Consulting Group analyst has a price target of US$43.00 per share, while the most pessimistic values it at US$29.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Bowman Consulting Group shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Bowman Consulting Group's revenue growth is expected to slow, with the forecast 20% annualised growth rate until the end of 2024 being well below the historical 37% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.2% annually. So it's pretty clear that, while Bowman Consulting Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts are expecting Bowman Consulting Group to become unprofitable next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 Bowman Consulting Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Bowman Consulting Group going out to 2025, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Bowman Consulting Group that you should be aware of.

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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.