L.B. Foster Company Just Missed EPS By 48%: Here's What Analysts Think Will Happen Next

Investors in L.B. Foster Company (NASDAQ:FSTR) had a good week, as its shares rose 7.6% to close at US$24.28 following the release of its second-quarter results. Statutory earnings per share fell badly short of expectations, coming in at US$0.27, some 48% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$144m. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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After the latest results, the twin analysts covering L.B. Foster are now predicting revenues of US$542.5m in 2025. If met, this would reflect a modest 7.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 66% to US$1.18 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$540.1m and earnings per share (EPS) of US$1.65 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

View our latest analysis for L.B. Foster

It might be a surprise to learn that the consensus price target was broadly unchanged at US$28.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

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 L.B. Foster's growth to accelerate, with the forecast 14% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.8% per annum 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 4.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect L.B. Foster 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. Happily, there were no major changes to revenue forecasts, with the business still 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for L.B. Foster (1 doesn't sit too well with us!) 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.