Earnings Miss: XPEL, Inc. Missed EPS By 21% And Analysts Are Revising Their Forecasts

XPEL, Inc. (NASDAQ:XPEL) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasts. Results showed a clear earnings miss, with US$90m revenue coming in 4.2% lower than what the analystexpected. Statutory earnings per share (EPS) of US$0.24 missed the mark badly, arriving some 21% below what was expected. Following the result, the analyst has 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 analyst is expecting for next year.

See our latest analysis for XPEL

Taking into account the latest results, XPEL's sole analyst currently expect revenues in 2024 to be US$408.2m, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 8.0% to US$1.60 in the same period. In the lead-up to this report, the analyst had been modelling revenues of US$441.1m and earnings per share (EPS) of US$2.13 in 2024. The analyst seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 28% to US$48.50, with the weaker earnings outlook clearly leading valuation estimates.

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. It's pretty clear that there is an expectation that XPEL's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.6% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than XPEL.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for XPEL. 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. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on XPEL. Long-term earnings power is much more important than next year's profits. We have analyst estimates for XPEL going out as far as 2025, 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 XPEL 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.