It's shaping up to be a tough period for Mimi's Rock Corp. (CVE:MIMI), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with CA$40m revenue coming in 5.9% lower than what the analystsexpected. Statutory earnings per share (EPS) of CA$0.04 missed the mark badly, arriving some 33% below what was expected. 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.

See our latest analysis for Mimi's Rock

Taking into account the latest results, the current consensus from Mimi's Rock's twin analysts is for revenues of CA$43.2m in 2021, which would reflect a satisfactory 7.2% increase on its sales over the past 12 months. Mimi's Rock is also expected to turn profitable, with statutory earnings of CA$0.04 per share. Before this earnings report, the analysts had been forecasting revenues of CA$46.4m and earnings per share (EPS) of CA$0.08 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 9.1% to CA$1.00, 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 Mimi's Rock's past performance and to peers in the same industry. We would highlight that Mimi's Rock's revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2021 being well below the historical 14% growth over the last year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Mimi's Rock.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues 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 Mimi's Rock's future valuation.

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. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

It is also worth noting that we have found 2 warning signs for Mimi's Rock (1 shouldn't be ignored!) that you need to take into consideration.

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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