Pet Valu Holdings Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a pretty great week for Pet Valu Holdings Ltd. (TSE:PET) shareholders, with its shares surging 11% to CA$26.40 in the week since its latest full-year results. Pet Valu Holdings reported CA$1.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$1.21 beat expectations, being 5.2% higher than what the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Pet Valu Holdings

Taking into account the latest results, the most recent consensus for Pet Valu Holdings from nine analysts is for revenues of CA$1.18b in 2025. If met, it would imply a reasonable 7.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 9.0% to CA$1.35. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$1.17b and earnings per share (EPS) of CA$1.34 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of CA$32.45, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Pet Valu Holdings at CA$39.00 per share, while the most bearish prices it at CA$28.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Pet Valu Holdings shareholders.

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 pretty clear that there is an expectation that Pet Valu Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.4% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% 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 Pet Valu Holdings.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Pet Valu Holdings' revenue is expected to perform worse than the wider industry. 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. We have estimates - from multiple Pet Valu Holdings analysts - going out to 2027, 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 1 warning sign for Pet Valu Holdings 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.