Want to participate in a short research study? Help shape the future of investing tools and earn a $40 gift card!
As you might know, Insteel Industries, Inc. (NASDAQ:IIIN) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 5.6% to hit US$122m. Insteel Industries also reported a statutory profit of US$0.34, which was an impressive 143% above what the analyst had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Insteel Industries after the latest results.
Taking into account the latest results, the sole analyst covering Insteel Industries provided consensus estimates of US$431.8m revenue in 2021, which would reflect a small 3.6% decline on its sales over the past 12 months. Statutory earnings per share are predicted to surge 102% to US$1.03. In the lead-up to this report, the analyst had been modelling revenues of US$457.6m and earnings per share (EPS) of US$1.01 in 2021. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The average price target was steady at US$19.00even though revenue estimates declined; likely suggesting the analyst place a higher value on earnings.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 3.6% revenue decline a notable change from historical growth of 1.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.1% annually for the foreseeable future. It's pretty clear that Insteel Industries' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analyst holding their earnings forecasts steady, in line with previous estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
It is also worth noting that we have found 2 warning signs for Insteel Industries that you need to take into consideration.
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 email@example.com.