Exponent, Inc. (NASDAQ:EXPO) Analysts Are Cutting Their Estimates: Here's What You Need To Know

It's been a sad week for Exponent, Inc. (NASDAQ:EXPO), who've watched their investment drop 12% to US$78.39 in the week since the company reported its annual result. Exponent reported in line with analyst predictions, delivering revenues of US$497m and statutory earnings per share of US$1.94, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Exponent after the latest results.

View our latest analysis for Exponent

Taking into account the latest results, Exponent's three analysts currently expect revenues in 2024 to be US$506.1m, approximately in line with the last 12 months. Statutory earnings per share are expected to decline 11% to US$1.77 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$541.5m and earnings per share (EPS) of US$2.16 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The consensus price target fell 7.5% to US$93.00, with the weaker earnings outlook clearly leading valuation estimates. 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 Exponent, with the most bullish analyst valuing it at US$95.00 and the most bearish at US$91.00 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. We would highlight that Exponent's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2024 being well below the historical 7.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Exponent is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Exponent. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Exponent going out to 2025, and you can see them free on our platform here.

We also provide an overview of the Exponent Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.