It's been a pretty great week for Fiesta Restaurant Group, Inc. (NASDAQ:FRGI) shareholders, with its shares surging 15% to US$7.72 in the week since its latest first-quarter results. Revenues were in line with expectations, at US$147m, while statutory losses ballooned to US$0.29 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus, from the two analysts covering Fiesta Restaurant Group, is for revenues of US$550.4m in 2020, which would reflect a considerable 14% reduction in Fiesta Restaurant Group's sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 76% to US$0.85. Before this earnings announcement, the analysts had been modelling revenues of US$604.5m and losses of US$0.10 per share in 2020. While this year's revenue estimates dropped there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 13% to US$7.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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. Over the past five years, revenues have declined around 0.3% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 14% decline in revenue next year. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 13% next year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Fiesta Restaurant Group to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Fiesta Restaurant Group going out as far as 2021, 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 Fiesta Restaurant Group you should know about.
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