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Hawkins, Inc. (NASDAQ:HWKN) shareholders are probably feeling a little disappointed, since its shares fell 8.7% to US$106 in the week after its latest second-quarter results. Revenues came in 4.8% below expectations, at US$247m. Statutory earnings per share were relatively better off, with a per-share profit of US$1.16 being roughly in line with analyst estimates. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Hawkins
Taking into account the latest results, the most recent consensus for Hawkins from dual analysts is for revenues of US$961.1m in 2025. If met, it would imply a satisfactory 2.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 11% to US$4.33. Before this earnings report, the analysts had been forecasting revenues of US$988.7m and earnings per share (EPS) of US$4.28 in 2025. 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 consensus price target rose 25% to US$121, with the analysts apparently satisfied with the business performance despite lower revenue forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hawkins' past performance and to peers in the same industry. We would highlight that Hawkins' revenue growth is expected to slow, with the forecast 5.8% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.6% per year. So it's pretty clear that, while Hawkins' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also downgraded Hawkins' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.