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Lakeland Industries, Inc. (NASDAQ:LAKE) just released its latest quarterly results and things are looking bullish. Statutory earnings performance was extremely strong, with revenue of US$46m beating expectations by 44% and earnings per share (EPS) of US$1.07, an impressive 312%ahead of expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the three analysts covering Lakeland Industries are now predicting revenues of US$150.9m in 2021. If met, this would reflect a decent 17% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 33% to US$2.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$115.6m and earnings per share (EPS) of US$0.78 in 2021. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
It will come as no surprise to learn that the analysts have increased their price target for Lakeland Industries 40% to US$28.33 on the back of these upgrades. 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 Lakeland Industries analyst has a price target of US$31.00 per share, while the most pessimistic values it at US$24.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Lakeland Industries' rate of growth is expected to accelerate meaningfully, with the forecast 17% revenue growth noticeably faster than its historical growth of 3.0%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.7% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Lakeland Industries is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lakeland Industries' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Lakeland Industries going out to 2022, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Lakeland Industries (1 is significant) you should be aware of.
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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. Thank you for reading.