Construction Partners, Inc. (NASDAQ:ROAD) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 7.8% over the past week, closing at US$81.77. Could this big upgrade push the stock even higher?
Following the upgrade, the most recent consensus for Construction Partners from its five analysts is for revenues of US$2.4b in 2025 which, if met, would be a huge 36% increase on its sales over the past 12 months. Per-share earnings are expected to soar 36% to US$1.81. Before this latest update, the analysts had been forecasting revenues of US$2.1b and earnings per share (EPS) of US$1.79 in 2025. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.
The consensus price target increased 27% to US$85.60, with an improved revenue forecast carrying the promise of a more valuable business, in time.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Construction Partners' growth to accelerate, with the forecast 28% annualised growth to the end of 2025 ranking favourably alongside historical growth of 19% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Construction Partners is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Construction Partners.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Construction Partners going out to 2026, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
