Shareholders will be ecstatic, with their stake up 31% over the past week following USANA Health Sciences, Inc.'s (NYSE:USNA) latest full-year results. Revenues were US$1.1b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$4.41 were also better than expected, beating analyst predictions by 11%. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Following last week's earnings report, USANA Health Sciences's two analysts are forecasting 2020 revenues to be US$1.07b, approximately in line with the last 12 months. Statutory earnings per share are expected to accumulate 2.8% to US$4.53. Before this earnings report, analysts had been forecasting revenues of US$1.06b and earnings per share (EPS) of US$4.38 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$77.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We would highlight that USANA Health Sciences's revenue growth is expected to slow, with forecast 0.5% increase next year well below the historical 6.5%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 6.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than USANA Health Sciences.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards USANA Health Sciences following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that USANA Health Sciences's revenues are expected to perform worse than the wider market. 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for USANA Health Sciences going out as far as 2021, and you can see them free on our platform here.
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