Yahoo Finance Earnings Miss: Academy Sports and Outdoors, Inc. Missed EPS By 14% And Analysts Are Revising Their Forecasts
Academy Sports and Outdoors, Inc. (NASDAQ:ASO) shareholders are probably feeling a little disappointed, since its shares fell 6.5% to US$51.37 in the week after its latest first-quarter results. It was not a great result overall. While revenues of US$1.4b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 14% to hit US$1.01 per share. 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.
Check out our latest analysis for Academy Sports and Outdoors
Taking into account the latest results, Academy Sports and Outdoors' 19 analysts currently expect revenues in 2025 to be US$6.16b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 8.4% to US$6.37 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$6.25b and earnings per share (EPS) of US$6.67 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The average price target fell 14% to US$65.44, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Academy Sports and Outdoors at US$85.00 per share, while the most bearish prices it at US$53.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past three years have seen revenue shrink 1.8% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.7% per year. So it's pretty clear that, although revenues are improving, Academy Sports and Outdoors is still expected to grow slower than the industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Academy Sports and Outdoors' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Academy Sports and Outdoors. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Academy Sports and Outdoors analysts - going out to 2027, and you can see them free on our platform here.
It might also be worth considering whether Academy Sports and Outdoors' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
