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Tilly's, Inc. (NYSE:TLYS) just released its quarterly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$140m, some 7.1% above estimates, and statutory earnings per share (EPS) coming in at US$0.07, 1,650% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the five analysts covering Tilly's are now predicting revenues of US$619.4m in 2022. If met, this would reflect a meaningful 18% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Tilly's forecast to report a statutory profit of US$0.65 per share. In the lead-up to this report, the analysts had been modelling revenues of US$615.3m and earnings per share (EPS) of US$0.63 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 24% to US$10.50. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Tilly's analyst has a price target of US$11.00 per share, while the most pessimistic values it at US$10.00. This is a very narrow spread of estimates, implying either that Tilly's is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Tilly's' growth to accelerate, with the forecast 18% growth ranking favourably alongside historical growth of 1.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tilly's is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Tilly's following these results. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Tilly's going out to 2023, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Tilly's that you should be aware of.
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. 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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