Interface, Inc. Just Recorded A 27% EPS Beat: Here's What Analysts Are Forecasting Next

Last week, you might have seen that Interface, Inc. (NASDAQ:TILE) released its quarterly result to the market. The early response was not positive, with shares down 3.2% to US$16.70 in the past week. It looks like a credible result overall - although revenues of US$347m were what the analysts expected, Interface surprised by delivering a (statutory) profit of US$0.38 per share, an impressive 27% above what was forecast. 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.

Check out our latest analysis for Interface

Following the latest results, Interface's three analysts are now forecasting revenues of US$1.31b in 2024. This would be an okay 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 15% to US$1.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.30b and earnings per share (EPS) of US$1.15 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.

There's been no major changes to the consensus price target of US$22.67, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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 Interface analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$21.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 clear from the latest estimates that Interface's rate of growth is expected to accelerate meaningfully, with the forecast 6.6% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.6% annually. Interface is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Interface following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Interface. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Interface going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Interface has 2 warning signs we think 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com