One Analyst's Earnings Estimates For Radiant Logistics, Inc. (NYSEMKT:RLGT) Are Surging Higher

Radiant Logistics, Inc. (NYSEMKT:RLGT) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 16% to US$7.45 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

Following the latest upgrade, the sole analyst covering Radiant Logistics provided consensus estimates of US$792m revenue in 2021, which would reflect a small 6.5% decline on its sales over the past 12 months. Per-share earnings are expected to expand 15% to US$0.27. Previously, the analyst had been modelling revenues of US$719m and earnings per share (EPS) of US$0.20 in 2021. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Radiant Logistics

It will come as no surprise to learn that the analyst has increased their price target for Radiant Logistics 17% to US$8.75 on the back of these upgrades. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Radiant Logistics at US$9.00 per share, while the most bearish prices it at US$8.50. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analyst has a clear view on its prospects.

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. We would highlight that sales are expected to reverse, with the forecast 6.5% revenue decline a notable change from historical growth of 2.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Radiant Logistics is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Radiant Logistics.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

When trading Radiant Logistics or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.