Results: VSE Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates
VSE Corporation (NASDAQ:VSEC) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 5.6% to hit US$541m. VSE also reported a statutory profit of US$1.49, which was an impressive 53% above what the analysts had forecast. 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.
Taking into account the latest results, the most recent consensus for VSE from twelve analysts is for revenues of US$2.20b in 2027. If met, it would imply a sizeable 36% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 34% to US$5.43. Before this earnings report, the analysts had been forecasting revenues of US$2.20b and earnings per share (EPS) of US$5.28 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for VSE
There's been no major changes to the consensus price target of US$251, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values VSE at US$280 per share, while the most bearish prices it at US$215. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that VSE's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that VSE is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around VSE's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$251, 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 estimates - from multiple VSE analysts - going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for VSE that you need to take into consideration.
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