The analysts might have been a bit too bullish on Ethan Allen Interiors Inc. (NYSE:ETD), given that the company fell short of expectations when it released its quarterly results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$167m, statutory earnings missed forecasts by 19%, coming in at just US$0.68 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Ethan Allen Interiors
Following the recent earnings report, the consensus from twin analysts covering Ethan Allen Interiors is for revenues of US$673.6m in 2024. This implies a measurable 4.4% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to decline 15% to US$2.67 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$709.9m and earnings per share (EPS) of US$3.01 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The consensus price target fell 9.1% to US$30.00, with the weaker earnings outlook clearly leading valuation estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ethan Allen Interiors' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.7% by the end of 2024. This indicates a significant reduction from annual growth of 2.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ethan Allen Interiors is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ethan Allen Interiors. On the negative side, they also downgraded their revenue estimates, and 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 Ethan Allen Interiors' future valuation.
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 analyst estimates for Ethan Allen Interiors going out as far as 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Ethan Allen Interiors has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
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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.