Results: V2X, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

V2X, Inc. (NYSE:VVX) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.9% to hit US$1.0b. V2X also reported a statutory profit of US$0.04, which was an impressive 200% above what the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on V2X after the latest results.

Check out our latest analysis for V2X

Taking into account the latest results, the current consensus from V2X's five analysts is for revenues of US$4.17b in 2024. This would reflect an okay 3.4% increase on its revenue over the past 12 months. V2X is also expected to turn profitable, with statutory earnings of US$1.19 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.15b and earnings per share (EPS) of US$1.25 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$61.40, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic V2X analyst has a price target of US$68.00 per share, while the most pessimistic values it at US$52.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the V2X's past performance and to peers in the same industry. It's pretty clear that there is an expectation that V2X's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.3% per year. So it's pretty clear that, while V2X's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 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 estimates - from multiple V2X analysts - going out to 2025, 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 1 warning sign with V2X , and understanding it 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.