Last week, you might have seen that J & J Snack Foods Corp. (NASDAQ:JJSF) released its quarterly result to the market. The early response was not positive, with shares down 2.8% to US$125 in the past week. J & J Snack Foods beat revenue forecasts by a solid 15%, hitting US$215m. Statutory losses also blew out, with the loss per share reaching US$0.67, some 474% bigger than the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the three analysts covering J & J Snack Foods, is for revenues of US$1.03b in 2021, which would reflect a noticeable 4.7% reduction in J & J Snack Foods' sales over the past 12 months. Statutory earnings per share are predicted to leap 50% to US$3.00. Before this earnings report, the analysts had been forecasting revenues of US$1.03b and earnings per share (EPS) of US$2.79 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$127, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on J & J Snack Foods, with the most bullish analyst valuing it at US$140 and the most bearish at US$125 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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 sales are expected to reverse, with the forecast 4.7% revenue decline a notable change from historical growth of 4.5% 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 2.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - J & J Snack Foods is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around J & J Snack Foods' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. 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 Simply Wall St, we have a full range of analyst estimates for J & J Snack Foods going out to 2022, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 3 warning signs for J & J Snack Foods you should know about.
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 firstname.lastname@example.org.