Shareholders of Construction Partners, Inc. (NASDAQ:ROAD) will be pleased this week, given that the stock price is up 13% to US$103 following its latest second-quarter results. Although revenues of US$572m were in line with analyst expectations, Construction Partners surprised on the earnings front, with an unexpected (statutory) profit of US$0.08 per share a nice improvement on the losses that the analystsforecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the six analysts covering Construction Partners are now predicting revenues of US$2.78b in 2025. If met, this would reflect a major 27% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 86% to US$2.04. In the lead-up to this report, the analysts had been modelling revenues of US$2.70b and earnings per share (EPS) of US$1.89 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

View our latest analysis for Construction Partners

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$108, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Construction Partners, with the most bullish analyst valuing it at US$120 and the most bearish at US$100.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Construction Partners is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Construction Partners' growth to accelerate, with the forecast 61% annualised growth to the end of 2025 ranking favourably alongside historical growth of 21% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Construction Partners to grow faster than the wider industry.

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The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Construction Partners following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Construction Partners. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Construction Partners going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Construction Partners (1 is concerning!) 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.

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