Quanta Services, Inc. Just Recorded A 14% EPS Beat: Here's What Analysts Are Forecasting Next

Last week, you might have seen that Quanta Services, Inc. (NYSE:PWR) released its first-quarter result to the market. The early response was not positive, with shares down 2.0% to US$256 in the past week. Revenues were US$5.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.79 were also better than expected, beating analyst predictions by 14%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Quanta Services

After the latest results, the 16 analysts covering Quanta Services are now predicting revenues of US$22.7b in 2024. If met, this would reflect a satisfactory 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 16% to US$6.10. In the lead-up to this report, the analysts had been modelling revenues of US$22.6b and earnings per share (EPS) of US$6.07 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.

There were no changes to revenue or earnings estimates or the price target of US$267, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Quanta Services, with the most bullish analyst valuing it at US$307 and the most bearish at US$165 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Quanta Services' revenue growth is expected to slow, with the forecast 7.7% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.9% annually. So it's pretty clear that, while Quanta Services' revenue growth is expected to slow, it's expected to grow roughly in line with the 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Quanta Services going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Quanta Services , and understanding them should be part of your investment process.

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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.