The Simply Good Foods Company (NASDAQ:SMPL) Just Released Its Full-Year Earnings: Here's What Analysts Think
It's been a pretty great week for The Simply Good Foods Company (NASDAQ:SMPL) shareholders, with its shares surging 13% to US$37.83 in the week since its latest annual results. Results were roughly in line with estimates, with revenues of US$1.2b and statutory earnings per share of US$1.08. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Simply Good Foods
Taking into account the latest results, the current consensus from Simply Good Foods' twelve analysts is for revenues of US$1.24b in 2023, which would reflect an okay 6.4% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 34% to US$1.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.23b and earnings per share (EPS) of US$1.45 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$41.77. 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 Simply Good Foods, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$32.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Simply Good Foods' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.4% per year. So it's pretty clear that, while Simply Good Foods' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Simply Good Foods. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Simply Good Foods analysts - going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Simply Good Foods , and understanding this should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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