Last week, you might have seen that H&E Equipment Services, Inc. (NASDAQ:HEES) released its quarterly result to the market. The early response was not positive, with shares down 5.8% to US$52.25 in the past week. It was not a great result overall. While revenues of US$385m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 13% to hit US$0.85 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, H&E Equipment Services' six analysts are now forecasting revenues of US$1.56b in 2025. This would be a reasonable 3.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 4.9% to US$3.79 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.59b and earnings per share (EPS) of US$3.98 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$62.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on H&E Equipment Services, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$60.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting H&E Equipment Services is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that H&E Equipment Services' revenue growth is expected to slow, with the forecast 2.4% annualised growth rate until the end of 2025 being well below the historical 6.4% 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 5.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that H&E Equipment Services 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that H&E Equipment Services' revenue is expected to 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for H&E Equipment Services going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for H&E Equipment Services that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
