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Shareholders in Methode Electronics, Inc. (NYSE:MEI) had a terrible week, as shares crashed 40% to US$6.55 in the week since its latest quarterly results. Revenues were US$240m, with Methode Electronics reporting some 8.9% below analyst expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Methode Electronics
Taking into account the latest results, Methode Electronics' two analysts currently expect revenues in 2026 to be US$1.09b, approximately in line with the last 12 months. Methode Electronics is also expected to turn profitable, with statutory earnings of US$0.67 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.15b and earnings per share (EPS) of US$0.85 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The consensus price target fell 18% to US$11.50, with the weaker earnings outlook clearly leading valuation estimates.
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. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 1.5% growth on an annualised basis. That is in line with its 1.7% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 7.3% annually. So although Methode Electronics is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Methode Electronics' future valuation.