V2X, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Last week, you might have seen that V2X, Inc. (NYSE:VVX) released its second-quarter result to the market. The early response was not positive, with shares down 5.8% to US$47.39 in the past week. Revenues of US$1.1b beat expectations by 5.1%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.21 compared to previous analyst expectations of a profit. 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. 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 V2X

Following the latest results, V2X's six analysts are now forecasting revenues of US$4.24b in 2024. This would be a credible 2.9% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with V2X forecast to report a statutory profit of US$0.84 per share. Before this earnings report, the analysts had been forecasting revenues of US$4.18b and earnings per share (EPS) of US$1.14 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$60.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values V2X at US$68.00 per share, while the most bearish prices it at US$54.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting V2X is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the 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 5.8% growth on an annualised basis. This is compared to a historical growth rate of 28% 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) 2.7% 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for V2X. Happily, there were no major changes to revenue forecasts, with the business still 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.

Plus, you should also learn about the 1 warning sign we've spotted with V2X .

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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.