Yahoo Finance Interface, Inc. Just Recorded A 29% EPS Beat: Here's What Analysts Are Forecasting Next
Investors in Interface, Inc. (NASDAQ:TILE) had a good week, as its shares rose 6.6% to close at US$13.68 following the release of its first-quarter results. Revenues were US$288m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.22, an impressive 29% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Interface after the latest results.
Check out our latest analysis for Interface
Taking into account the latest results, the consensus forecast from Interface's three analysts is for revenues of US$1.34b in 2022, which would reflect a decent 8.6% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 26% to US$1.30. Before this earnings report, the analysts had been forecasting revenues of US$1.29b and earnings per share (EPS) of US$1.26 in 2022. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$19.33, suggesting that the forecast performance does not have a long term impact on the company's 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. There are some variant perceptions on Interface, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$17.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Interface's growth to accelerate, with the forecast 12% annualised growth to the end of 2022 ranking favourably alongside historical growth of 3.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Interface is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Interface's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Interface going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - Interface has 1 warning sign we think 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.
