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Results: Helen of Troy Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

Simply Wall St

Helen of Troy Limited (NASDAQ:HELE) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 6.4% to hit US$475m. Helen of Troy also reported a statutory profit of US$2.71, which was an impressive 27% above what analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts 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 analysts' statutory forecasts suggest is in store for next year.

See our latest analysis for Helen of Troy

NasdaqGS:HELE Past and Future Earnings, January 11th 2020

Taking into account the latest results, the most recent consensus for Helen of Troy from six analysts is for revenues of US$1.71b in 2021, which is a reasonable 3.6% increase on its sales over the past 12 months. Statutory earnings per share are expected to accumulate 6.3% to US$8.16. In the lead-up to this report, analysts had been modelling revenues of US$1.68b and earnings per share (EPS) of US$7.99 in 2021. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 7.3% to US$200, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. There are some variant perceptions on Helen of Troy, with the most bullish analyst valuing it at US$227 and the most bearish at US$166 per share. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

In addition, we can look to Helen of Troy's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. Analysts are definitely expecting Helen of Troy's growth to accelerate, with the forecast 3.6% growth ranking favourably alongside historical growth of 1.9% per annum over the past five years. Compare this with other companies in the same market, which are forecast to see a revenue decline of 5.1% next year. It seems obvious that, while the future growth outlook is brighter than the recent past, analysts also expect Helen of Troy to grow slower than the wider market.

The Bottom Line

The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Helen of Troy's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.

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 Helen of Troy going out to 2022, and you can see them free on our platform here..

It might also be worth considering whether Helen of Troy's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.