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Earnings Update: Iconix Brand Group, Inc. (NASDAQ:ICON) Just Reported And Analysts Are Trimming Their Forecasts

Simply Wall St
·3 mins read

The annual results for Iconix Brand Group, Inc. (NASDAQ:ICON) were released last week, making it a good time to revisit its performance. Revenues were in line with expectations, at US$149m, while statutory losses ballooned to US$10.56 per share. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

See our latest analysis for Iconix Brand Group

NasdaqGS:ICON Past and Future Earnings April 1st 2020
NasdaqGS:ICON Past and Future Earnings April 1st 2020

Taking into account the latest results, the sole analyst covering Iconix Brand Group provided consensus estimates of US$113.8m revenue in 2020, which would reflect a substantial 24% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 91% to US$0.98. Before this latest report, the consensus had been expecting revenues of US$133.0m and US$0.80 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analyst making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 60% to US$4.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Over the past five years, revenues have declined around 20% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 24% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.8% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect Iconix Brand Group to suffer worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Iconix Brand Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Iconix Brand Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Iconix Brand Group going out as far as 2020, and you can see them free on our platform here.

Before you take the next step you should know about the 5 warning signs for Iconix Brand Group (3 are concerning!) that we have uncovered.

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.

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. Thank you for reading.