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Karat Packaging Inc. (NASDAQ:KRT) just released its first-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.9% to hit US$105m. Karat Packaging also reported a statutory profit of US$0.34, which was an impressive 24% above what the analysts had forecast. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Karat Packaging
Taking into account the latest results, the current consensus from Karat Packaging's three analysts is for revenues of US$436.9m in 2022, which would reflect a meaningful 11% increase on its sales over the past 12 months. Statutory earnings per share are predicted to increase 5.0% to US$1.36. Before this earnings report, the analysts had been forecasting revenues of US$430.7m and earnings per share (EPS) of US$1.36 in 2022. 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$31.00, 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. The most optimistic Karat Packaging analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$29.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Karat Packaging's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.1% annually. So it's pretty clear that, while Karat Packaging's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.