Liquidity Services, Inc. Just Recorded A 29% EPS Beat: Here's What Analysts Are Forecasting Next

Liquidity Services, Inc. (NASDAQ:LQDT) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Liquidity Services delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$91m-15% above indicated-andUS$0.18-29% above forecasts- respectively 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 Liquidity Services

Taking into account the latest results, the most recent consensus for Liquidity Services from dual analysts is for revenues of US$334.8m in 2024. If met, it would imply a satisfactory 3.5% increase on its revenue over the past 12 months. Statutory earnings per share are expected to fall 12% to US$0.59 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$312.9m and earnings per share (EPS) of US$0.69 in 2024. So it's pretty clear the analysts have mixed opinions on Liquidity Services after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.

Curiously, the consensus price target rose 15% to US$27.50. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Liquidity Services' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.1% growth on an annualised basis. This is compared to a historical growth rate of 9.6% over the past five years. Compare this to the 151 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.6% per year. Factoring in the forecast slowdown in growth, it looks like Liquidity Services is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Liquidity Services. They also upgraded their revenue forecasts, although the latest estimates suggest that Liquidity Services will grow in line with the overall 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

It is also worth noting that we have found 2 warning signs for Liquidity Services 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.