The Toro Company Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders might have noticed that The Toro Company (NYSE:TTC) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.5% to US$89.23 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$1.0b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.5% to hit US$0.62 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Toro

Following the latest results, Toro's seven analysts are now forecasting revenues of US$4.67b in 2024. This would be a satisfactory 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 56% to US$4.30. In the lead-up to this report, the analysts had been modelling revenues of US$4.68b and earnings per share (EPS) of US$4.32 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$101, 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. There are some variant perceptions on Toro, with the most bullish analyst valuing it at US$112 and the most bearish at US$93.00 per share. This is a very narrow spread of estimates, implying either that Toro is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Toro's past performance and to peers in the same industry. We would highlight that Toro's revenue growth is expected to slow, with the forecast 8.0% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.4% annually. Even after the forecast slowdown in growth, it seems obvious that Toro is also expected to grow faster than the wider industry.

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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

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. At Simply Wall St, we have a full range of analyst estimates for Toro going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 4 warning signs for Toro you should know about.

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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.