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1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) defied analyst predictions to release its quarterly results, which were ahead of market expectations. 1-800-FLOWERS.COM delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$877m, some 16% above indicated. Statutory EPS were US$1.76, an impressive 29% ahead of forecasts. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from 1-800-FLOWERS.COM's five analysts is for revenues of US$1.95b in 2021, which would reflect a reasonable 5.1% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to sink 15% to US$1.37 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.75b and earnings per share (EPS) of US$1.17 in 2021. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
It will come as no surprise to learn that the analysts have increased their price target for 1-800-FLOWERS.COM 17% to US$40.67on the back of these upgrades. 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. There are some variant perceptions on 1-800-FLOWERS.COM, with the most bullish analyst valuing it at US$47.00 and the most bearish at US$30.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await 1-800-FLOWERS.COM shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that 1-800-FLOWERS.COM's revenue growth will slow down substantially, with revenues next year expected to grow 5.1%, compared to a historical growth rate of 6.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. Factoring in the forecast slowdown in growth, it seems obvious that 1-800-FLOWERS.COM is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around 1-800-FLOWERS.COM's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 1-800-FLOWERS.COM going out to 2023, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for 1-800-FLOWERS.COM that you should be aware of.
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. 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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