REV Group, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

REV Group, Inc. (NYSE:REVG) just released its latest second-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.6% to hit US$617m. REV Group also reported a statutory profit of US$0.28, which was an impressive 37% above what the analysts had forecast. 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.

View our latest analysis for REV Group

Taking into account the latest results, the current consensus, from the three analysts covering REV Group, is for revenues of US$2.45b in 2024. This implies a measurable 5.0% reduction in REV Group's revenue over the past 12 months. Statutory earnings per share are expected to reduce 5.3% to US$4.43 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.49b and earnings per share (EPS) of US$4.37 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 19% to US$29.00despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of REV Group's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values REV Group at US$33.00 per share, while the most bearish prices it at US$22.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 would highlight that revenue is expected to reverse, with a forecast 9.7% annualised decline to the end of 2024. That is a notable change from historical growth of 1.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - REV Group is expected to lag the wider 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for REV Group going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for REV Group (2 can't be ignored!) that you need to take into consideration.

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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.