Virco Mfg. Corporation Just Reported A Surprise Profit, And Analysts Lifted Their Estimates

Investors in Virco Mfg. Corporation (NASDAQ:VIRC) had a good week, as its shares rose 5.4% to close at US$8.64 following the release of its quarterly results. Revenues of US$34m missed forecasts by 18%, but despite this Virco Mfg reported a surprise statutory profit instead of the losses that the analyst had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Virco Mfg's single analyst is for revenues of US$263.1m in 2026. This would reflect a reasonable 3.9% increase on its revenue over the past 12 months. Statutory earnings per share are expected to nosedive 22% to US$1.00 in the same period. Before this earnings report, the analyst had been forecasting revenues of US$270.5m and earnings per share (EPS) of US$0.79 in 2026. Although the analyst has lowered their revenue forecasts, they've also made a great increase in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

View our latest analysis for Virco Mfg

The analyst has cut their price target 29% to US$12.00per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings.

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. We would highlight that Virco Mfg's revenue growth is expected to slow, with the forecast 5.2% annualised growth rate until the end of 2026 being well below the historical 13% 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 6.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Virco Mfg is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Virco Mfg following these results. 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. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Virco Mfg's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Virco Mfg , and understanding this should be part of your investment process.

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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.