It's been a good week for Goodfood Market Corp. (TSE:FOOD) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.2% to CA$3.70. It was an okay report, and revenues came in at CA$59m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the 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 the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Goodfood Market's six analysts are now forecasting revenues of CA$259.5m in 2020. This would be a major 23% improvement in sales compared to the last 12 months. Before this earnings result, the analysts had predicted CA$252.9m revenue in 2020, although there was no accompanying EPS estimate. It looks like there's been a clear increase in sentiment after the latest results, given the small lift in revenue estimates.
Additionally, the consensus price target for Goodfood Market rose 13% to CA$4.86, showing a clear increase in optimism from the the analysts involved. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Goodfood Market at CA$5.00 per share, while the most bearish prices it at CA$4.50. Even so, with a relatively close grouping of analyst estimates, it looks to us as though the analysts are quite confident in their valuations, suggesting that Goodfood Market is an easy business to forecast or that the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Goodfood Market's revenue growth is expected to slow, with forecast 23% increase next year well below the historical 79%p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% next year. Even after the forecast slowdown in growth, it seems obvious that Goodfood Market is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts upgraded their revenue estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
We have estimates for Goodfood Market from its six analysts out to 2022, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for Goodfood Market (1 is significant!) that we have uncovered.
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