Kits Eyecare Ltd. (TSE:KITS) Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Shareholders might have noticed that Kits Eyecare Ltd. (TSE:KITS) filed its quarterly result this time last week. The early response was not positive, with shares down 6.0% to CA$9.36 in the past week. Results were overall in line with expectations, with the company breaking even at the statutory earnings per share (EPS) level on CA$42m in revenue. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kits Eyecare after the latest results.

View our latest analysis for Kits Eyecare

After the latest results, the seven analysts covering Kits Eyecare are now predicting revenues of CA$191.2m in 2025. If met, this would reflect a huge 31% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Kits Eyecare forecast to report a statutory profit of CA$0.12 per share. Before this earnings report, the analysts had been forecasting revenues of CA$186.3m and earnings per share (EPS) of CA$0.11 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$15.50, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Kits Eyecare analyst has a price target of CA$17.50 per share, while the most pessimistic values it at CA$14.50. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Kits Eyecare's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 19% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 1.1% per year. So it's clear with the acceleration in growth, Kits Eyecare is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kits Eyecare's earnings potential next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. The consensus price target held steady at CA$15.50, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Kits Eyecare going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Kits Eyecare that we have uncovered.

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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.