Stock Analysis

News Flash: Analysts Just Made A Meaningful Upgrade To Their Hooker Furniture Corporation (NASDAQ:HOFT) Forecasts

  •  Updated
NasdaqGS:HOFT
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Hooker Furniture Corporation (NASDAQ:HOFT) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. Investors have been pretty optimistic on Hooker Furniture too, with the stock up 15% to US$41.15 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, Hooker Furniture's lone analyst is now forecasting revenues of US$694m in 2022. This would be a solid 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 25% to US$3.58. Prior to this update, the analyst had been forecasting revenues of US$621m and earnings per share (EPS) of US$2.80 in 2022. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Hooker Furniture

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NasdaqGS:HOFT Earnings and Revenue Growth June 5th 2021

With these upgrades, we're not surprised to see that the analyst has lifted their price target 11% to US$51.00 per share.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analyst is definitely expecting Hooker Furniture's growth to accelerate, with the forecast 22% annualised growth to the end of 2022 ranking favourably alongside historical growth of 4.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Hooker Furniture is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Hooker Furniture could be worth investigating further.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Hooker Furniture that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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What are the risks and opportunities for Hooker Furnishings?

Hooker Furnishings Corporation designs, manufactures, imports, and markets residential household, hospitality, and contract furniture.

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Rewards

  • Trading at 50.8% below our estimate of its fair value

  • Earnings are forecast to grow 26.96% per year

Risks

  • Profit margins (1.6%) are lower than last year (3.9%)

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Hooker Furnishings

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