Yahoo Finance Analysts Have Made A Financial Statement On Kathmandu Holdings Limited's (NZSE:KMD) Half-Year Report
Investors in Kathmandu Holdings Limited (NZSE:KMD) had a good week, as its shares rose 6.3% to close at NZ$1.34 following the release of its half-yearly results. Results overall were respectable, with statutory earnings of NZ$0.016 per share roughly in line with what the analysts had forecast. Revenues of NZ$411m came in 2.2% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Kathmandu Holdings
After the latest results, the nine analysts covering Kathmandu Holdings are now predicting revenues of NZ$950.4m in 2021. If met, this would reflect a solid 12% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 208% to NZ$0.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of NZ$947.0m and earnings per share (EPS) of NZ$0.083 in 2021. Although the revenue estimates have not really changed, we can see there's been a considerable lift to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of NZ$1.70, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Kathmandu Holdings, with the most bullish analyst valuing it at NZ$1.75 and the most bearish at NZ$1.60 per share. This is a very narrow spread of estimates, implying either that Kathmandu Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. The analysts are definitely expecting Kathmandu Holdings' growth to accelerate, with the forecast 25% annualised growth to the end of 2021 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kathmandu Holdings is expected to grow much 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 Kathmandu Holdings 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Kathmandu Holdings going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with Kathmandu Holdings (including 1 which can't be ignored) .
This article by Simply Wall St is general in nature. 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.
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