Last week, you might have seen that Orion Group Holdings, Inc. (NYSE:ORN) released its first-quarter result to the market. The early response was not positive, with shares down 6.1% to US$5.39 in the past week. It looks like a credible result overall - although revenues of US$153m were what the analysts expected, Orion Group Holdings surprised by delivering a (statutory) profit of US$0.03 per share, an impressive 50% 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. NYSE:ORN Earnings and Revenue Growth May 1st 2021
Taking into account the latest results, Orion Group Holdings' four analysts currently expect revenues in 2021 to be US$697.2m, approximately in line with the last 12 months. Statutory earnings per share are expected to plummet 44% to US$0.34 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$697.2m and earnings per share (EPS) of US$0.34 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$7.92. 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. There are some variant perceptions on Orion Group Holdings, with the most bullish analyst valuing it at US$8.25 and the most bearish at US$7.50 per share. This is a very narrow spread of estimates, implying either that Orion Group Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Orion Group Holdings' past performance and to peers in the same industry. We would highlight that Orion Group Holdings' revenue growth is expected to slow, with the forecast 0.1% annualised growth rate until the end of 2021 being well below the historical 5.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Orion Group Holdings.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$7.92, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Orion Group Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Orion Group Holdings analysts - going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Orion Group Holdings .
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.
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