U.S. Markets closed
  • S&P 500

    4,662.85
    +3.82 (+0.08%)
     
  • Dow 30

    35,911.81
    -201.79 (-0.56%)
     
  • Nasdaq

    14,893.75
    +86.95 (+0.59%)
     
  • Russell 2000

    2,162.46
    +3.02 (+0.14%)
     
  • Crude Oil

    84.29
    +0.47 (+0.56%)
     
  • Gold

    1,818.60
    +2.10 (+0.12%)
     
  • Silver

    23.01
    +0.10 (+0.42%)
     
  • EUR/USD

    1.1412
    -0.0004 (-0.0342%)
     
  • 10-Yr Bond

    1.7720
    +0.0610 (+3.57%)
     
  • Vix

    19.19
    -1.12 (-5.51%)
     
  • GBP/USD

    1.3646
    -0.0033 (-0.2443%)
     
  • USD/JPY

    114.5990
    +0.3990 (+0.3494%)
     
  • BTC-USD

    42,228.26
    -989.31 (-2.29%)
     
  • CMC Crypto 200

    1,001.89
    -23.84 (-2.32%)
     
  • FTSE 100

    7,611.23
    +68.28 (+0.91%)
     
  • Nikkei 225

    28,333.52
    +209.24 (+0.74%)
     

Express, Inc. (NYSE:EXPR) Analysts Are Pretty Bullish On The Stock After Recent Results

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Shareholders will be ecstatic, with their stake up 80% over the past week following Express, Inc.'s (NYSE:EXPR) latest yearly results. Revenues came in at US$1.2b, in line with forecasts and the company reported a statutory loss of US$0.82 per share, roughly in line with expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Express

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Express' three analysts is for revenues of US$1.67b in 2022, which would reflect a major 39% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 79% to US$1.34. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.66b and losses of US$0.32 per share in 2022. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Although the analysts are now forecasting higher losses, the average price target rose 47% to US$1.42, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Express analyst has a price target of US$3.50 per share, while the most pessimistic values it at US$1.25. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. One thing stands out from these estimates, which is that Express is forecast to grow faster in the future than it has in the past, with revenues expected to display 39% annualised growth until the end of 2022. If achieved, this would be a much better result than the 8.1% 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 11% per year. So it looks like Express is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Express. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Express going out to 2023, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Express (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.