Earnings Miss: Tennant Company Missed EPS By 28% And Analysts Are Revising Their Forecasts

Tennant Company (NYSE:TNC) just released its latest first-quarter report and things are not looking great. Results showed a clear earnings miss, with US$290m revenue coming in 2.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.69 missed the mark badly, arriving some 28% below what was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, Tennant's three analysts currently expect revenues in 2025 to be US$1.25b, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 27% to US$4.65. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.24b and earnings per share (EPS) of US$4.77 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Check out our latest analysis for Tennant

It might be a surprise to learn that the consensus price target was broadly unchanged at US$128, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Tennant analyst has a price target of US$143 per share, while the most pessimistic values it at US$115. This is a very narrow spread of estimates, implying either that Tennant is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.1% by the end of 2025. This indicates a significant reduction from annual growth of 4.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tennant is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tennant. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Tennant's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$128, 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. We have estimates - from multiple Tennant analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Tennant that you need to take into consideration.

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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.