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Crown Crafts, Inc. Recorded A 10% Miss On Revenue: Analysts Are Revisiting Their Models

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Investors in Crown Crafts, Inc. (NASDAQ:CRWS) had a good week, as its shares rose 7.7% to close at US$7.53 following the release of its second-quarter results. Revenues were US$19m, 10% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share loss of US$0.18 being in line with what analysts forecast. 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. We thought readers would find it interesting to see analysts' latest post-earnings forecasts for next year.

View our latest analysis for Crown Crafts

NasdaqCM:CRWS Past and Future Earnings, November 15th 2019
NasdaqCM:CRWS Past and Future Earnings, November 15th 2019

Taking into account the latest results, the current consensus from Crown Crafts's lone analyst is for revenues of US$77.5m in 2020, which would reflect a credible 3.5% increase on its sales over the past 12 months. Earnings per share are expected to increase 8.1% to US$0.62. Yet prior to the latest earnings, analysts had been forecasting revenues of US$77.5m and earnings per share (EPS) of US$0.52 in 2020. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.

The consensus price target rose 20% to US$6.00, suggesting that higher earnings estimates flow through to the stock's valuation as well.

Further, we can compare these estimates to past performance, and see how Crown Crafts forecasts compare to the wider market's forecast performance. For example, we noticed that Crown Crafts's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 3.5%, well above its historical decline of 3.8% a year over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 7.0% next year. Although Crown Crafts's revenues are expected to improve, it seems that analysts are still bearish on the business, forecasting it to grow slower than the wider market.

The Bottom Line

The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Crown Crafts's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Crown Crafts's revenues are expected to perform worse than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.