Results: Orion Group Holdings, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Shareholders will be ecstatic, with their stake up 22% over the past week following Orion Group Holdings, Inc.'s (NYSE:ORN) latest first-quarter results. Orion Group Holdings beat expectations by 5.5% with revenues of US$167m. It also surprised on the earnings front, with an unexpected statutory profit of US$0.09 per share a nice improvement on the losses that the analysts forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Orion Group Holdings

Following the recent earnings report, the consensus from three analysts covering Orion Group Holdings is for revenues of US$692.6m in 2020, implying a small 5.4% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to dive 22% to US$0.14 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$720.1m and earnings per share (EPS) of US$0.15 in 2020. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

It'll come as no surprise then, to learn thatthe analysts have cut their price target 21% to US$5.70. 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. The most optimistic Orion Group Holdings analyst has a price target of US$7.40 per share, while the most pessimistic values it at US$4.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 5.4%, a significant reduction from annual growth of 7.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Orion Group Holdings is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Orion Group Holdings. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Orion Group Holdings' future valuation.

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 Orion Group Holdings going out to 2024, and you can see them free on our platform here..

Plus, you should also learn about the 5 warning signs we've spotted with Orion Group Holdings (including 1 which is a bit concerning) .

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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