CECO Environmental Corp. (NASDAQ:CECO) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Unfortunately, CECO Environmental delivered a serious earnings miss. Revenues of US$136m were 13% below expectations, and statutory earnings per share of US$0.06 missed estimates by 61%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, CECO Environmental's six analysts are now forecasting revenues of US$689.8m in 2025. This would be a huge 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 202% to US$1.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$671.9m and earnings per share (EPS) of US$1.11 in 2025. So it's pretty clear consensus is mixed on CECO Environmental after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.
The consensus price target was unchanged at US$34.50, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic CECO Environmental analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$33.00. 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.
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 CECO Environmental'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 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that CECO Environmental is expected to grow much faster than its 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$34.50, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for CECO Environmental going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for CECO Environmental that you should be aware of.
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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.
