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National Beverage Corp. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

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Simply Wall St
·4 min read
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It's been a sad week for National Beverage Corp. (NASDAQ:FIZZ), who've watched their investment drop 12% to US$84.40 in the week since the company reported its quarterly result. Results look mixed - while revenue fell marginally short of analyst estimates at US$272m, statutory earnings beat expectations 7.4%, with National Beverage reporting profits of US$1.01 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for National Beverage

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

Taking into account the latest results, National Beverage's four analysts currently expect revenues in 2021 to be US$1.06b, approximately in line with the last 12 months. Per-share earnings are expected to increase 2.4% to US$3.54. Before this earnings report, the analysts had been forecasting revenues of US$1.08b and earnings per share (EPS) of US$3.46 in 2021. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The average price target increased 8.1% to US$80.25, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. 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. Currently, the most bullish analyst values National Beverage at US$90.00 per share, while the most bearish prices it at US$61.00. 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 National Beverage shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that National Beverage's revenue growth is expected to slow, with forecast 0.8% increase next year well below the historical 8.4%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.4% next year. Factoring in the forecast slowdown in growth, it seems obvious that National Beverage is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards National Beverage following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. We have estimates - from multiple National Beverage analysts - going out to 2025, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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@simplywallst.com.