Northwest Pipe Company Just Recorded A 5.9% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a pretty great week for Northwest Pipe Company (NASDAQ:NWPX) shareholders, with its shares surging 14% to US$33.91 in the week since its latest yearly results. Northwest Pipe reported US$444m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.09 beat expectations, being 5.9% higher than what the analysts 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Northwest Pipe

Following the latest results, Northwest Pipe's three analysts are now forecasting revenues of US$460.3m in 2024. This would be an okay 3.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 8.6% to US$2.31. Before this earnings report, the analysts had been forecasting revenues of US$455.4m and earnings per share (EPS) of US$2.29 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.8% to US$41.33. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 Northwest Pipe analyst has a price target of US$44.00 per share, while the most pessimistic values it at US$40.00. This is a very narrow spread of estimates, implying either that Northwest Pipe is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Northwest Pipe's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Northwest Pipe is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Northwest Pipe's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Northwest Pipe. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Northwest Pipe going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Northwest Pipe that we have uncovered.

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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.