Shareholders in Destination XL Group, Inc. (NASDAQ:DXLG) had a terrible week, as shares crashed 37% to US$0.33 in the week since its latest annual results. The results overall were pretty much dead in line with analyst forecasts; revenues were US$474m and statutory losses were US$0.16 per share. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Destination XL Group after the latest results.
Following the recent earnings report, the consensus fromone analyst covering Destination XL Group is for revenues of US$458.3m in 2021, implying a noticeable 3.3% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 47% (on a statutory basis) to US$0.23. Before this earnings report, the analyst had been forecasting revenues of US$491.8m and earnings per share (EPS) of US$0.02 in 2021. There looks to have been a significant drop in sentiment regarding Destination XL Group's prospects after these latest results, with a minor downgrade to revenues and the analyst now forecasting a loss instead of a profit.
The average price target fell 25% to US$3.00, implicitly signalling that lower earnings per share are a leading indicator for Destination XL Group's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 3.3%, a significant reduction from annual growth of 2.5% 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 4.5% annually for the foreseeable future. It's pretty clear that Destination XL Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Destination XL Group dropped from profits to a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
Plus, you should also learn about the 5 warning signs we've spotted with Destination XL Group (including 2 which shouldn't be ignored) .
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