There's been a notable change in appetite for V2X, Inc. (NYSE:VVX) shares in the week since its third-quarter report, with the stock down 19% to US$41.60. Revenues of US$1.0b beat expectations by 3.4%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.21 compared to previous analyst expectations of a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for V2X

Taking into account the latest results, the consensus forecast from V2X's four analysts is for revenues of US$4.08b in 2024. This reflects a reasonable 4.5% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with V2X forecast to report a statutory profit of US$1.36 per share. Before this earnings report, the analysts had been forecasting revenues of US$4.07b and earnings per share (EPS) of US$2.40 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$62.20, 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. The most optimistic V2X analyst has a price target of US$68.00 per share, while the most pessimistic values it at US$59.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the V2X's past performance and to peers in the same industry. It's pretty clear that there is an expectation that V2X's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.6% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that V2X is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider 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.

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 V2X going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for V2X you should be aware of, and 1 of them is a bit unpleasant.

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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.