It's been a mediocre week for American Outdoor Brands, Inc. (NASDAQ:AOUT) shareholders, with the stock dropping 17% to US$28.04 in the week since its latest yearly results. Revenues were US$277m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.29 were also better than expected, beating analyst predictions by 17%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, American Outdoor Brands' four analysts are forecasting 2022 revenues to be US$278.2m, approximately in line with the last 12 months. Statutory earnings per share are forecast to sink 16% to US$1.10 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$278.2m and earnings per share (EPS) of US$1.10 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$40.40, 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. There are some variant perceptions on American Outdoor Brands, with the most bullish analyst valuing it at US$44.00 and the most bearish at US$36.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. We would highlight that American Outdoor Brands' revenue growth is expected to slow, with the forecast 0.6% annualised growth rate until the end of 2022 being well below the historical 14% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that American Outdoor Brands is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$40.40, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for American Outdoor Brands going out to 2024, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for American Outdoor Brands you should know about.
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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