Results: VSE Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a pretty great week for VSE Corporation (NASDAQ:VSEC) shareholders, with its shares surging 14% to US$118 in the week since its latest quarterly results. The result was positive overall - although revenues of US$274m were in line with what the analysts predicted, VSE surprised by delivering a statutory profit of US$0.63 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for VSE

Taking into account the latest results, the most recent consensus for VSE from six analysts is for revenues of US$1.26b in 2025. If met, it would imply a major 24% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 165% to US$4.40. Before this earnings report, the analysts had been forecasting revenues of US$1.26b and earnings per share (EPS) of US$4.45 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.2% to US$120. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values VSE at US$133 per share, while the most bearish prices it at US$100.00. This is a very narrow spread of estimates, implying either that VSE is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that VSE's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect VSE to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on VSE. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple VSE analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 5 warning signs we've spotted with VSE (including 1 which makes us a bit uncomfortable) .

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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.