As you might know, Construction Partners, Inc. (NASDAQ:ROAD) just kicked off its latest third-quarter results with some very strong numbers. The company beat expectations with revenues of US$999m arriving 5.3% ahead of forecasts. Statutory earnings per share (EPS) were US$1.06, 8.7% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Construction Partners after the latest results.

Following the latest results, Construction Partners' six analysts are now forecasting revenues of US$4.09b in 2027. This would be a decent 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 56% to US$3.92. In the lead-up to this report, the analysts had been modelling revenues of US$4.00b and earnings per share (EPS) of US$3.73 in 2027. 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.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$143, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Construction Partners analyst has a price target of US$165 per share, while the most pessimistic values it at US$130. 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.

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 pretty clear that there is an expectation that Construction Partners' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% annually. So it's pretty clear that, while Construction Partners' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Construction Partners' earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Construction Partners will grow in line with the overall industry. The consensus price target held steady at US$143, with the latest estimates not enough to have an impact on their price targets.

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. We have estimates - from multiple Construction Partners analysts - going out to 2027, 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 1 warning sign with Construction Partners , and understanding this should be part of your investment process.

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.