Earnings Beat: Sterling Infrastructure, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, Sterling Infrastructure, Inc. (NASDAQ:STRL) just kicked off its latest quarterly results with some very strong numbers. The company beat forecasts, with revenue of US$440m, some 4.4% above estimates, and statutory earnings per share (EPS) coming in at US$1.00, 22% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Sterling Infrastructure

After the latest results, the two analysts covering Sterling Infrastructure are now predicting revenues of US$2.21b in 2024. If met, this would reflect a decent 9.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 9.0% to US$5.30. Before this earnings report, the analysts had been forecasting revenues of US$2.18b and earnings per share (EPS) of US$4.98 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 6.6% to US$121, suggesting that higher earnings estimates flow through to the stock's valuation as well.

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. We can infer from the latest estimates that forecasts expect a continuation of Sterling Infrastructure'shistorical trends, as the 13% annualised revenue growth to the end of 2024 is roughly in line with the 13% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.8% annually. So it's pretty clear that Sterling Infrastructure is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sterling Infrastructure's earnings potential next year. 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. 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 Sterling Infrastructure. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Even so, be aware that Sterling Infrastructure is showing 1 warning sign in our investment analysis , you should know about...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.