Yahoo Finance Vestis Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Vestis Corporation (NYSE:VSTS) just released its latest second-quarter report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$705m, statutory earnings missed forecasts by an incredible 72%, coming in at just US$0.05 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Vestis after the latest results.
Check out our latest analysis for Vestis
Following last week's earnings report, Vestis' seven analysts are forecasting 2024 revenues to be US$2.85b, approximately in line with the last 12 months. Statutory earnings per share are forecast to tumble 73% to US$0.33 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.94b and earnings per share (EPS) of US$0.72 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.
The consensus price target fell 28% to US$16.63, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Vestis analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$10.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Vestis' revenue growth is expected to slow, with the forecast 0.3% annualised growth rate until the end of 2024 being well below the historical 3.1% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Vestis is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Vestis. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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. We have estimates - from multiple Vestis analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Vestis (1 doesn't sit too well with us!) that you should be aware of.
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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.
