Foraco International SA Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Foraco International SA (TSE:FAR) shareholders are probably feeling a little disappointed, since its shares fell 8.6% to CA$1.60 in the week after its latest quarterly results. Foraco International missed revenue estimates by 5.0%, coming in atUS$70m, although statutory earnings per share (EPS) of US$0.064 beat expectations, coming in 6.6% ahead of analyst estimates. 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.

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Taking into account the latest results, the consensus forecast from Foraco International's four analysts is for revenues of US$280.7m in 2025. This reflects a satisfactory 6.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 13% to US$0.22. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$298.5m and earnings per share (EPS) of US$0.26 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

View our latest analysis for Foraco International

The analysts made no major changes to their price target of CA$3.88, suggesting the downgrades are not expected to have a long-term impact on Foraco International's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Foraco International, with the most bullish analyst valuing it at CA$4.75 and the most bearish at CA$3.25 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Foraco International's growth to accelerate, with the forecast 14% annualised growth to the end of 2025 ranking favourably alongside historical growth of 8.2% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 16% per year. Foraco International is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at CA$3.88, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Foraco International. Long-term earnings power is much more important than next year's profits. We have forecasts for Foraco International going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Foraco International , and understanding this should be part of your investment process.

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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.