Bel Fuse Inc. Just Missed Earnings - But Analysts Have Updated Their Models
One of the biggest stories of last week was how Bel Fuse Inc. (NASDAQ:BELF.A) shares plunged 22% in the week since its latest annual results, closing yesterday at US$59.49. Revenues of US$640m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$5.52, missing estimates by 9.7%. The 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Bel Fuse
Taking into account the latest results, the two analysts covering Bel Fuse provided consensus estimates of US$569.9m revenue in 2024, which would reflect a chunky 11% decline over the past 12 months. Statutory earnings per share are expected to nosedive 24% to US$4.40 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$662.6m and earnings per share (EPS) of US$6.11 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
It'll come as no surprise then, to learn that the analysts have cut their price target 24% to US$63.00.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 11% by the end of 2024. This indicates a significant reduction from annual growth of 6.7% 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 5.3% annually for the foreseeable future. It's pretty clear that Bel Fuse's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Bel Fuse. 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 Bel Fuse's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Bel Fuse. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
You still need to take note of risks, for example - Bel Fuse has 2 warning signs (and 1 which can't be ignored) we think 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.
