The Gorman-Rupp Company Just Beat EPS By 28%: Here's What Analysts Think Will Happen Next
The Gorman-Rupp Company (NYSE:GRC) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 6.4% to hit US$193m. Gorman-Rupp also reported a statutory profit of US$0.86, which was an impressive 28% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Gorman-Rupp's three analysts is for revenues of US$774.1m in 2027. This reflects a credible 7.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 14% to US$3.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$764.6m and earnings per share (EPS) of US$3.16 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for Gorman-Rupp
The analysts reconfirmed their price target of US$84.33, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Gorman-Rupp analyst has a price target of US$89.00 per share, while the most pessimistic values it at US$80.00. 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. We would highlight that Gorman-Rupp's revenue growth is expected to slow, with the forecast 5.7% annualised growth rate until the end of 2027 being well below the historical 12% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Gorman-Rupp is also expected to grow slower than other industry participants.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Gorman-Rupp's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$84.33, 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 Gorman-Rupp going out to 2028, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Gorman-Rupp , and understanding these should be part of your investment process.
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