Yahoo Finance Results: Dr. Martens plc Exceeded Expectations And The Consensus Has Updated Its Estimates
Shareholders will be ecstatic, with their stake up 24% over the past week following Dr. Martens plc's (LON:DOCS) latest annual results. Revenues were UK£908m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of UK£0.18 were also better than expected, beating analyst predictions by 15%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Dr. Martens after the latest results.
Check out our latest analysis for Dr. Martens
Taking into account the latest results, the current consensus from Dr. Martens' seven analysts is for revenues of UK£1.06b in 2023, which would reflect a decent 17% increase on its sales over the past 12 months. Per-share earnings are expected to increase 9.4% to UK£0.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£1.05b and earnings per share (EPS) of UK£0.19 in 2023. So the consensus seems to have become somewhat more optimistic on Dr. Martens' earnings potential following these results.
The consensus price target was unchanged at UK£4.09, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Dr. Martens at UK£5.50 per share, while the most bearish prices it at UK£3.20. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.7% per year. So it's pretty clear that Dr. Martens is forecast to grow substantially faster than its 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 Dr. Martens following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at UK£4.09, with the latest estimates not enough to have an impact on their price targets.
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 Dr. Martens analysts - going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Dr. Martens , and understanding them should be part of your investment process.
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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.
