Shareholders of Mayville Engineering Company, Inc. (NYSE:MEC) will be pleased this week, given that the stock price is up 17% to US$16.24 following its latest first-quarter results. It looks like a credible result overall - although revenues of US$161m were in line with what the analysts predicted, Mayville Engineering Company surprised by delivering a statutory profit of US$0.16 per share, a notable 10% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mayville Engineering Company after the latest results.
After the latest results, the five analysts covering Mayville Engineering Company are now predicting revenues of US$632.1m in 2024. If met, this would reflect a satisfactory 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 68% to US$0.70. In the lead-up to this report, the analysts had been modelling revenues of US$631.1m and earnings per share (EPS) of US$0.69 in 2024. 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.
There were no changes to revenue or earnings estimates or the price target of US$19.50, suggesting that the company has met expectations in its recent result. 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. The most optimistic Mayville Engineering Company analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$15.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mayville Engineering Company's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Mayville Engineering Company'shistorical trends, as the 5.5% annualised revenue growth to the end of 2024 is roughly in line with the 6.6% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.6% annually. So it's pretty clear that Mayville Engineering Company is forecast to grow substantially faster than its industry.
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, 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. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Mayville Engineering Company going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Mayville Engineering Company (1 makes us a bit uncomfortable!) that you should be aware of.
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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.