Here's What Analysts Are Forecasting For FGI Industries Ltd. (NASDAQ:FGI) Following Its Earnings Miss

It's shaping up to be a tough period for FGI Industries Ltd. (NASDAQ:FGI), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. It looks like a clear earnings miss, with both revenues and earnings falling well short of analyst predictions. Revenues of US$39m missed by 17%, and statutory earnings per share of US$0.11 fell short of forecasts by 15%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out the opportunities and risks within the US Trade Distributors industry.

Following the recent earnings report, the consensus from twin analysts covering FGI Industries is for revenues of US$154.8m in 2023, implying a considerable 15% decline in sales compared to the last 12 months. Statutory earnings per share are expected to dip 4.1% to US$0.41 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$190.3m and earnings per share (EPS) of US$0.44 in 2023. Indeed, we can see that sentiment has declined measurably after results came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.

The consensus price target fell 17% to US$5.00, with the weaker earnings outlook clearly leading valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2023. This indicates a significant reduction from annual growth of 17% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.4% annually for the foreseeable future. It's pretty clear that FGI Industries' revenues are expected to perform substantially worse than the wider industry.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than 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.

With that in mind, we wouldn't be too quick to come to a conclusion on FGI Industries. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 4 warning signs for FGI Industries (1 doesn't sit too well with us!) 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.