Shareholders in Bassett Furniture Industries, Incorporated (NASDAQ:BSET) had a terrible week, as shares crashed 24% to US$12.79 in the week since its latest full-year results. Things were not great overall, with a surprise (statutory) loss of US$0.19 per share on revenues of US$452m, even though analysts had been expecting a profit. Earnings are an important time for investors, as they can track a company's performance, look at what top 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 analysts are expecting for next year.
Following last week's earnings report, Bassett Furniture Industries's two analysts are forecasting 2020 revenues to be US$452.2m, approximately in line with the last 12 months. Bassett Furniture Industries is also expected to turn profitable, with statutory earnings of US$0.80 per share. Before this earnings report, analysts had been forecasting revenues of US$460.0m and earnings per share (EPS) of US$0.95 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$18.00, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Bassett Furniture Industries's performance in recent years. It's pretty clear that analysts expect Bassett Furniture Industries's revenue growth will slow down substantially, with revenues next year expected to grow 0.03%, compared to a historical growth rate of 4.1% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Bassett Furniture Industries.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Bassett Furniture Industries's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Bassett Furniture Industries. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Bassett Furniture Industries going out as far as 2021, and you can see them free on our platform here.
We also provide an overview of the Bassett Furniture Industries Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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