Last week saw the newest quarterly earnings release from Lawson Products, Inc. (NASDAQ:LAWS), an important milestone in the company's journey to build a stronger business. Statutory earnings per share fell badly short of expectations, coming in at US$0.39, some 26% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$104m. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lawson Products after the latest results.
See our latest analysis for Lawson Products
Taking into account the latest results, the current consensus from Lawson Products' two analysts is for revenues of US$428.9m in 2021, which would reflect a huge 22% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 53% to US$2.57. Before this earnings report, the analysts had been forecasting revenues of US$420.1m and earnings per share (EPS) of US$2.43 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that the analysts have increased their price target for Lawson Products 12% to US$64.00on the back of these upgrades.
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. The analysts are definitely expecting Lawson Products' growth to accelerate, with the forecast 30% annualised growth to the end of 2021 ranking favourably alongside historical growth of 6.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Lawson Products is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Lawson Products following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.