ESCO Technologies Inc. (NYSE:ESE) Released Earnings Last Week And Analysts Lifted Their Price Target To US$148

ESCO Technologies Inc. (NYSE:ESE) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at US$1.0b, statutory earnings were in line with expectations, at US$3.94 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for ESCO Technologies

Following the latest results, ESCO Technologies' four analysts are now forecasting revenues of US$1.16b in 2025. This would be a meaningful 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 22% to US$4.81. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.17b and earnings per share (EPS) of US$4.87 in 2025. 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.8% to US$148. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on ESCO Technologies, with the most bullish analyst valuing it at US$155 and the most bearish at US$136 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that ESCO Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.2% p.a. 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 2.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ESCO Technologies to grow faster than the wider industry.

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. Happily, there were no major changes to revenue forecasts, with the business still 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for ESCO Technologies going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for ESCO Technologies 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.