Shareholders will be ecstatic, with their stake up 31% over the past week following Noodles & Company's (NASDAQ:NDLS) latest first-quarter results. It looks like the results were pretty good overall. While revenues of US$121m were in line with analyst predictions, statutory losses were much smaller than expected, with Noodles losing US$0.14 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, Noodles' three analysts are now forecasting revenues of US$515.3m in 2024. This would be an okay 3.3% improvement in revenue compared to the last 12 months. Losses are expected to hold steady at around US$0.28. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$519.1m and losses of US$0.33 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a notable improvement in losses per share in particular.

The consensus price target fell 8.3% to US$3.67despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Noodles at US$4.00 per share, while the most bearish prices it at US$3.00. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Noodles' rate of growth is expected to accelerate meaningfully, with the forecast 4.4% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 9.7% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Noodles is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Noodles' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Noodles. Long-term earnings power is much more important than next year's profits. We have forecasts for Noodles going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 5 warning signs for Noodles you should be aware of, and 1 of them is significant.

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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.