Tetra Tech, Inc. (NASDAQ:TTEK) Just Reported Annual Earnings: Have Analysts Changed Their Mind On The Stock?

There's been a notable change in appetite for Tetra Tech, Inc. (NASDAQ:TTEK) shares in the week since its annual report, with the stock down 12% to US$41.27. It was a credible result overall, with revenues of US$4.3b and statutory earnings per share of US$1.23 both in line with analyst estimates, showing that Tetra Tech is executing in line with expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Tetra Tech

Taking into account the latest results, the most recent consensus for Tetra Tech from six analysts is for revenues of US$4.65b in 2025. If met, it would imply a satisfactory 7.6% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 19% to US$1.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.67b and earnings per share (EPS) of US$1.51 in 2025. 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.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$50.60, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Tetra Tech at US$53.60 per share, while the most bearish prices it at US$47.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Tetra Tech's revenue growth is expected to slow, with the forecast 7.6% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.1% annually. So it's pretty clear that, while Tetra Tech's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

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. We have estimates - from multiple Tetra Tech analysts - going out to 2027, 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 Tetra Tech , and understanding this 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.