Yahoo Finance Earnings Miss: Simpson Manufacturing Co., Inc. Missed EPS By 8.0% And Analysts Are Revising Their Forecasts
The analysts might have been a bit too bullish on Simpson Manufacturing Co., Inc. (NYSE:SSD), given that the company fell short of expectations when it released its first-quarter results last week. Results look to have been somewhat negative - revenue fell 2.6% short of analyst estimates at US$531m, and statutory earnings of US$1.77 per share missed forecasts by 8.0%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Simpson Manufacturing
Taking into account the latest results, the consensus forecast from Simpson Manufacturing's four analysts is for revenues of US$2.27b in 2024. This reflects a credible 2.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 3.7% to US$8.35. In the lead-up to this report, the analysts had been modelling revenues of US$2.31b and earnings per share (EPS) of US$8.69 in 2024. 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 minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$194, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Simpson Manufacturing analyst has a price target of US$208 per share, while the most pessimistic values it at US$180. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Simpson Manufacturing's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Simpson Manufacturing's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Simpson Manufacturing.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Simpson Manufacturing's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$194, with the latest estimates not enough to have an impact on their price targets.
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 Simpson Manufacturing going out to 2026, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for Simpson Manufacturing that you need to be mindful 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.
