The quarterly results for Construction Partners, Inc. (NASDAQ:ROAD) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of US$397m were what the analysts expected, Construction Partners surprised by delivering a (statutory) profit of US$0.19 per share, an impressive 46% above what was forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, Construction Partners' six analysts are now forecasting revenues of US$1.80b in 2024. This would be a decent 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 24% to US$1.34. In the lead-up to this report, the analysts had been modelling revenues of US$1.79b and earnings per share (EPS) of US$1.28 in 2024. So the consensus seems to have become somewhat more optimistic on Construction Partners' earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.4% to US$50.00. 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. The most optimistic Construction Partners analyst has a price target of US$57.00 per share, while the most pessimistic values it at US$45.00. This is a very narrow spread of estimates, implying either that Construction Partners is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Construction Partners'historical trends, as the 15% annualised revenue growth to the end of 2024 is roughly in line with the 18% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.4% per year. So although Construction Partners is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Construction Partners following these results. 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. At Simply Wall St, we have a full range of analyst estimates for Construction Partners going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Construction Partners you should know about.

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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.