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Investors in Bassett Furniture Industries, Incorporated (NASDAQ:BSET) had a good week, as its shares rose 9.2% to close at US$23.35 following the release of its annual results. Revenues of US$386m were in line with expectations, although statutory losses per share were US$1.05, some 16% smaller than was expected. 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Bassett Furniture Industries from sole analyst is for revenues of US$451.2m in 2021 which, if met, would be a meaningful 17% increase on its sales over the past 12 months. Bassett Furniture Industries is also expected to turn profitable, with statutory earnings of US$1.50 per share. In the lead-up to this report, the analyst had been modelling revenues of US$441.4m and earnings per share (EPS) of US$1.38 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
With these upgrades, we're not surprised to see that the analyst has lifted their price target 13% to US$26.00per share.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Bassett Furniture Industries is forecast to grow faster in the future than it has in the past, with revenues expected to grow 17%. If achieved, this would be a much better result than the 1.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.4% per year. So it looks like Bassett Furniture Industries is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bassett Furniture Industries' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.
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. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Bassett Furniture Industries that you should be aware of.
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. 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.
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