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Sally Beauty Holdings, Inc. (NYSE:SBH) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Statutory earnings per share fell badly short of expectations, coming in at US$0.27, some 29% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$908m. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Sally Beauty Holdings
Taking into account the latest results, Sally Beauty Holdings' seven analysts currently expect revenues in 2024 to be US$3.71b, approximately in line with the last 12 months. Per-share earnings are expected to climb 19% to US$1.82. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.72b and earnings per share (EPS) of US$1.84 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$11.40, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Sally Beauty Holdings at US$14.00 per share, while the most bearish prices it at US$8.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 0.1% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.9% per year. Although Sally Beauty Holdings' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.