Revolve Group, Inc. Just Beat EPS By 5.1%: Here's What Analysts Think Will Happen Next
The investors in Revolve Group, Inc.'s (NYSE:RVLV) will be rubbing their hands together with glee today, after the share price leapt 35% to US$21.93 in the week following its yearly results. Revolve Group reported US$1.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.38 beat expectations, being 5.1% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Revolve Group
Following the latest results, Revolve Group's 19 analysts are now forecasting revenues of US$1.10b in 2024. This would be an okay 2.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 13% to US$0.45. In the lead-up to this report, the analysts had been modelling revenues of US$1.10b and earnings per share (EPS) of US$0.48 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Despite cutting their earnings forecasts,the analysts have lifted their price target 13% to US$18.89, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Revolve Group, with the most bullish analyst valuing it at US$29.00 and the most bearish at US$12.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Revolve Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Revolve Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.8% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Revolve Group.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Revolve Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Revolve Group's revenue is expected to perform worse 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.
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 Revolve Group analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that Revolve Group is showing 1 warning sign 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.
