It's been a mediocre week for The Hain Celestial Group, Inc. (NASDAQ:HAIN) shareholders, with the stock dropping 16% to US$21.28 in the week since its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of US$1.9b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.5% to hit US$0.83 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, Hain Celestial Group's nine analysts currently expect revenues in 2023 to be US$1.92b, approximately in line with the last 12 months. Statutory earnings per share are forecast to drop 10% to US$0.78 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.00b and earnings per share (EPS) of US$1.35 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 7.1% to US$30.42. 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. There are some variant perceptions on Hain Celestial Group, with the most bullish analyst valuing it at US$42.00 and the most bearish at US$24.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hain Celestial Group shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast out to 2023. That would be a definite improvement, given that the past five years have seen sales shrink 5.0% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 2.6% per year. So it's pretty clear that, although revenues are improving, Hain Celestial Group 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hain Celestial Group going out to 2025, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Hain Celestial Group 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.
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