Yahoo Finance The Aaron's Company, Inc. Just Beat EPS By 86%: Here's What Analysts Think Will Happen Next
The Aaron's Company, Inc. (NYSE:AAN) just released its quarterly report and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$481m, while EPS were US$1.04 beating analyst models by 86%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Aaron's Company
Following last week's earnings report, Aaron's Company's nine analysts are forecasting 2021 revenues to be US$1.76b, approximately in line with the last 12 months. Statutory earnings per share are forecast to shrink 5.1% to US$2.63 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.68b and earnings per share (EPS) of US$1.87 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 38% to US$35.57per share. 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. There are some variant perceptions on Aaron's Company, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$20.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. We would highlight that sales are expected to reverse, with a forecast 1.5% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 0.8% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Aaron's Company is expected to lag the wider 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 Aaron's Company following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Aaron's Company going out to 2025, and you can see them free on our platform here..
Even so, be aware that Aaron's Company is showing 3 warning signs in our investment analysis , you should know about...
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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