Yahoo Finance Some Ruth's Hospitality Group, Inc. (NASDAQ:RUTH) Analysts Just Made A Major Cut To Next Year's Estimates
Today is shaping up negative for Ruth's Hospitality Group, Inc. (NASDAQ:RUTH) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the latest downgrade, the four analysts covering Ruth's Hospitality Group provided consensus estimates of US$416m revenue in 2020, which would reflect a not inconsiderable 11% decline on its sales over the past 12 months. Statutory earnings per share are supposed to crater 48% to US$0.76 in the same period. Previously, the analysts had been modelling revenues of US$474m and earnings per share (EPS) of US$1.20 in 2020. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.
See our latest analysis for Ruth's Hospitality Group
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 11%, a significant reduction from annual growth of 6.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.0% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ruth's Hospitality Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Ruth's Hospitality Group's revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Ruth's Hospitality Group, and their negativity could be grounds for caution.
There might be good reason for analyst bearishness towards Ruth's Hospitality Group, like a weak balance sheet. For more information, you can click here to discover this and the 3 other concerns we've identified.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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