Earnings Miss: The Joint Corp. Missed EPS And Analysts Are Revising Their Forecasts
The investors in The Joint Corp.'s (NASDAQ:JYNT) will be rubbing their hands together with glee today, after the share price leapt 20% to US$11.88 in the week following its yearly results. Things were not great overall, with a surprise (statutory) loss of US$0.66 per share on revenues of US$118m, even though the analysts had been expecting a profit. Following the result, the analysts have 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Joint after the latest results.
See our latest analysis for Joint
Taking into account the latest results, the five analysts covering Joint provided consensus estimates of US$110.9m revenue in 2024, which would reflect a small 5.8% decline over the past 12 months. Earnings are expected to improve, with Joint forecast to report a statutory profit of US$0.044 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$115.0m and earnings per share (EPS) of US$0.19 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.
The analysts made no major changes to their price target of US$12.19, suggesting the downgrades are not expected to have a long-term impact on Joint's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Joint analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$8.75. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Joint shareholders.
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. We would highlight that revenue is expected to reverse, with a forecast 5.8% annualised decline to the end of 2024. That is a notable change from historical growth of 24% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.7% per year. It's pretty clear that Joint's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Joint. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Joint analysts - going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Joint you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
