Yahoo Finance Kimball Electronics, Inc. Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next
It's been a good week for Kimball Electronics, Inc. (NASDAQ:KE) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.0% to US$22.58. Revenues fell 3.4% short of expectations, at US$425m. Earnings correspondingly dipped, with Kimball Electronics reporting a statutory loss of US$0.24 per share, whereas the analysts had previously modelled a profit in this period. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Kimball Electronics
Following last week's earnings report, Kimball Electronics' five analysts are forecasting 2025 revenues to be US$1.79b, approximately in line with the last 12 months. Per-share earnings are expected to leap 46% to US$1.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.90b and earnings per share (EPS) of US$2.15 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$29.00 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Kimball Electronics analyst has a price target of US$34.00 per share, while the most pessimistic values it at US$25.00. 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.
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. We would highlight that Kimball Electronics' revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2025 being well below the historical 10% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Kimball Electronics.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kimball Electronics. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kimball Electronics going out to 2026, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 3 warning signs for Kimball Electronics that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
