L.B. Foster Company (NASDAQ:FSTR) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

It's been a mediocre week for L.B. Foster Company (NASDAQ:FSTR) shareholders, with the stock dropping 19% to US$21.61 in the week since its latest annual results. It looks like the results were a bit of a negative overall. While revenues of US$531m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.0% to hit US$3.89 per share. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 analyst has changed their earnings models, following these results.

Check out our latest analysis for L.B. Foster

Following last week's earnings report, L.B. Foster's one analyst are forecasting 2025 revenues to be US$540.0m, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 56% to US$1.74 in the same period. Before this earnings report, the analyst had been forecasting revenues of US$572.2m and earnings per share (EPS) of US$1.84 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The consensus price target fell 5.7% to US$33.00, with the weaker earnings outlook clearly leading valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. From these estimates it looks as though the analyst expects the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past five years have seen revenue shrink 0.5% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.5% per year. So it's pretty clear that, although revenues are improving, L.B. Foster is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of L.B. Foster's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on L.B. Foster. Long-term earnings power is much more important than next year's profits. We have analyst estimates for L.B. Foster going out as far as 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - L.B. Foster has 1 warning sign we think 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.