Results: H&E Equipment Services, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week saw the newest annual earnings release from H&E Equipment Services, Inc. (NASDAQ:HEES), an important milestone in the company's journey to build a stronger business. The result was positive overall - although revenues of US$1.5b were in line with what the analysts predicted, H&E Equipment Services surprised by delivering a statutory profit of US$4.66 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for H&E Equipment Services

Taking into account the latest results, the consensus forecast from H&E Equipment Services' four analysts is for revenues of US$1.58b in 2024. This reflects a modest 7.7% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$4.65, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$1.59b and earnings per share (EPS) of US$4.72 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 6.9% to US$66.83despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of H&E Equipment Services' earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic H&E Equipment Services analyst has a price target of US$75.00 per share, while the most pessimistic values it at US$60.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting H&E Equipment Services is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the H&E Equipment Services' past performance and to peers in the same industry. It's clear from the latest estimates that H&E Equipment Services' rate of growth is expected to accelerate meaningfully, with the forecast 7.7% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that H&E Equipment Services is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on H&E Equipment Services. Long-term earnings power is much more important than next year's profits. We have forecasts for H&E Equipment Services going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for H&E Equipment Services 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.