Investors in American Outdoor Brands, Inc. (NASDAQ:AOUT) had a good week, as its shares rose 9.7% to close at US$8.68 following the release of its quarterly results. Revenue of US$53m came in 4.4% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.23, a 15% miss. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on American Outdoor Brands after the latest results.
NasdaqGS:AOUT Earnings and Revenue Growth March 10th 2024
After the latest results, the dual analysts covering American Outdoor Brands are now predicting revenues of US$205.7m in 2025. If met, this would reflect a modest 4.4% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 44% to US$0.47. Before this latest report, the consensus had been expecting revenues of US$205.8m and US$0.46 per share in losses. So it's pretty clear consensus is mixed on American Outdoor Brands after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 12% to US$10.75, with the analysts signalling that growing losses would be a definite concern.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that American Outdoor Brands' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.5% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 0.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.4% per year. So it looks like American Outdoor Brands is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at American Outdoor Brands. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 American Outdoor Brands' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for American Outdoor Brands going out as far as 2025, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for American Outdoor Brands that you need to be mindful 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.