Celebrations may be in order for Floor & Decor Holdings, Inc. (NYSE:FND) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After this upgrade, Floor & Decor Holdings' 19 analysts are now forecasting revenues of US$2.3b in 2020. This would be a solid 11% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to decrease 6.4% to US$1.34 in the same period. Before this latest update, the analysts had been forecasting revenues of US$2.1b and earnings per share (EPS) of US$0.86 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, 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 Floor & Decor Holdings 36% to US$71.50 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Floor & Decor Holdings at US$85.00 per share, while the most bearish prices it at US$28.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Floor & Decor Holdings' past performance and to peers in the same industry. We would highlight that Floor & Decor Holdings' revenue growth is expected to slow, with forecast 11% increase next year well below the historical 21% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.3% next year. So it's pretty clear that, while Floor & Decor Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Floor & Decor Holdings.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Floor & Decor Holdings going out to 2024, and you can see them free on our platform here..
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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.
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