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The ONE Group Hospitality, Inc. (NASDAQ:STKS) just released its latest second-quarter report and things are not looking great. Revenues missed expectations somewhat, coming in at US$172m, but statutory earnings fell catastrophically short, with a loss of US$0.36 some 700% larger than what the analysts had predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for ONE Group Hospitality
Following the latest results, ONE Group Hospitality's three analysts are now forecasting revenues of US$715.2m in 2024. This would be a substantial 69% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 39% to US$0.23 per share. Before this earnings report, the analysts had been forecasting revenues of US$725.4m and earnings per share (EPS) of US$0.34 in 2024. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.
Although the analysts are now forecasting higher losses, the average price target rose 11% to 7.33333, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. 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 ONE Group Hospitality analyst has a price target of US$9.50 per share, while the most pessimistic values it at US$6.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that ONE Group Hospitality's rate of growth is expected to accelerate meaningfully, with the forecast 184% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 26% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ONE Group Hospitality is expected to grow much faster than its industry.