Yahoo Finance Liquidity Services, Inc. Just Missed Earnings - But Analysts Have Updated Their Models
Liquidity Services, Inc. (NASDAQ:LQDT) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$71m, statutory earnings missed forecasts by 14%, coming in at just US$0.06 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Liquidity Services
Following the latest results, Liquidity Services' two analysts are now forecasting revenues of US$325.5m in 2024. This would be a credible 3.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.9% to US$0.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$337.5m and earnings per share (EPS) of US$0.63 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The analysts have also increased their price target 15% to US$27.50, clearly signalling that lower revenue forecasts next year are not expected to have a material impact on Liquidity Services' valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Liquidity Services' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.1% growth on an annualised basis. This is compared to a historical growth rate of 9.1% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Liquidity Services is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Liquidity Services. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Liquidity Services going out as far as 2025, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Liquidity Services that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
