Revenue Beat: SunOpta Inc. Beat Analyst Estimates By 11%
The investors in SunOpta Inc.'s (NASDAQ:STKL) will be rubbing their hands together with glee today, after the share price leapt 20% to US$10.73 in the week following its quarterly results. SunOpta beat revenue forecasts by a solid 11% to hit US$244m. Statutory earnings per share came in at US$0.01, in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for SunOpta
Taking into account the latest results, the most recent consensus for SunOpta from five analysts is for revenues of US$914.3m in 2022 which, if met, would be a credible 3.1% increase on its sales over the past 12 months. SunOpta is also expected to turn profitable, with statutory earnings of US$0.03 per share. Before this earnings report, the analysts had been forecasting revenues of US$915.6m and earnings per share (EPS) of US$0.03 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to US$15.20. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on SunOpta, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$11.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that SunOpta is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.4% annualised growth until the end of 2022. If achieved, this would be a much better result than the 13% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.6% per year. So it looks like SunOpta is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 estimates - from multiple SunOpta analysts - going out to 2023, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with SunOpta .
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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.
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