RCI Hospitality Holdings, Inc. Just Missed EPS By 21%: Here's What Analysts Think Will Happen Next
Last week, you might have seen that RCI Hospitality Holdings, Inc. (NASDAQ:RICK) released its quarterly result to the market. The early response was not positive, with shares down 8.6% to US$56.99 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$74m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 21% to hit US$0.77 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for RCI Hospitality Holdings
Taking into account the latest results, the most recent consensus for RCI Hospitality Holdings from three analysts is for revenues of US$311.5m in 2024. If met, it would imply an okay 4.6% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 59% to US$4.46. Before this earnings report, the analysts had been forecasting revenues of US$312.8m and earnings per share (EPS) of US$4.74 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at US$107, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on RCI Hospitality Holdings, with the most bullish analyst valuing it at US$115 and the most bearish at US$94.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting RCI Hospitality Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
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 RCI Hospitality Holdings' revenue growth is expected to slow, with the forecast 6.2% annualised growth rate until the end of 2024 being well below the historical 15% 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 9.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that RCI Hospitality Holdings is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for RCI Hospitality Holdings going out to 2025, and you can see them free on our platform here.
Even so, be aware that RCI Hospitality Holdings is showing 3 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
