Holley Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Holley Inc. (NYSE:HLLY) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a pretty negative result overall, with revenues of US$134m missing analyst predictions by 6.0%. Worse, the business reported a statutory loss of US$0.05 per share, a substantial decline on analyst expectations of a profit. 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.

See our latest analysis for Holley

Following last week's earnings report, Holley's nine analysts are forecasting 2025 revenues to be US$627.7m, approximately in line with the last 12 months. Per-share earnings are expected to soar 105% to US$0.27. In the lead-up to this report, the analysts had been modelling revenues of US$658.9m and earnings per share (EPS) of US$0.36 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The consensus price target fell 12% to US$5.44, with the weaker earnings outlook clearly leading valuation estimates. 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 Holley at US$12.00 per share, while the most bearish prices it at US$3.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 Holley's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.3% growth on an annualised basis. This is compared to a historical growth rate of 5.7% 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 9.3% 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 Holley.

The Bottom Line

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

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. We have estimates - from multiple Holley analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Holley (1 shouldn't be ignored!) that you should be aware 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.