Analysts Have Been Trimming Their Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) Price Target After Its Latest Report
It's been a sad week for Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), who've watched their investment drop 16% to US$7.58 in the week since the company reported its yearly result. Revenues were in line with expectations, at US$1.3b, while statutory losses ballooned to US$1.34 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Red Robin Gourmet Burgers
After the latest results, the consensus from Red Robin Gourmet Burgers' three analysts is for revenues of US$1.25b in 2024, which would reflect a noticeable 3.7% decline in revenue compared to the last year of performance. Losses are expected to be contained, narrowing 13% from last year to US$1.19. Before this earnings announcement, the analysts had been modelling revenues of US$1.28b and losses of US$0.80 per share in 2024. So it's pretty clear the analysts have mixed opinions on Red Robin Gourmet Burgers after this update; revenues were downgraded and per-share losses expected to increase.
The consensus price target fell 20% to US$13.25, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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 Red Robin Gourmet Burgers, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$8.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 3.7% annualised decline to the end of 2024. That is a notable change from historical growth of 0.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Red Robin Gourmet Burgers is expected to lag 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 they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Red Robin Gourmet Burgers' future valuation.
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 estimates - from multiple Red Robin Gourmet Burgers analysts - going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Red Robin Gourmet Burgers you should know about.
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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.
