Volt Information Sciences, Inc. (NYSEMKT:VOLT) came out with its full-year results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. Revenues came in at US$997m, in line with forecasts and the company reported a statutory loss of US$0.72 per share, roughly in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
After the latest results, the consensus from Volt Information Sciences's one analyst is for revenues of US$943.9m in 2020, which would reflect a small 5.3% decline in sales compared to the last year of performance. Statutory losses are forecast to balloon 83% to US$0.12 per share. Before this latest report, the consensus had been expecting revenues of US$997.5m and US$0.09 per share in losses. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The consensus price target fell 13% to US$7.00, with analysts clearly concerned about the company following the weaker revenue and earnings outlook.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Volt Information Sciences's performance in recent years. One more thing stood out to us about these estimates, and it's that Volt Information Sciences's decline is expected to slow down, with revenues forecast to fall 5.3% next year, improving on a historical decline of 11% a year over the past five years. Compare this against analyst estimates for companies in the wider market, which suggest that revenues (in aggregate) are expected to decline 6.8% next year. So while it's not great to see that analysts are expecting a decline, at least Volt Information Sciences is forecast to shrink at a slower rate than the wider market.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Volt Information Sciences is moving incrementally towards profitability. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic 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 Volt Information Sciences going out as far as 2021, and you can see them free on our platform here.
It might also be worth considering whether Volt Information Sciences's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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