Stock Analysis

Results: Hooker Furniture Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

  •  Updated
NasdaqGS:HOFT
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It's been a good week for Hooker Furniture Corporation (NASDAQ:HOFT) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.2% to US$33.62. Revenues of US$150m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$0.84 an impressive 40% ahead of estimates. The analyst 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 collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

View our latest analysis for Hooker Furniture

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NasdaqGS:HOFT Earnings and Revenue Growth December 13th 2020

Taking into account the latest results, the consensus forecast from Hooker Furniture's one analyst is for revenues of US$602.7m in 2022, which would reflect a meaningful 9.6% improvement in sales compared to the last 12 months. Hooker Furniture is also expected to turn profitable, with statutory earnings of US$2.73 per share. In the lead-up to this report, the analyst had been modelling revenues of US$627.1m and earnings per share (EPS) of US$2.52 in 2022. If anything, the analyst looks to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of US$44.00, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year.

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. Next year brings more of the same, according to the analyst, with revenue forecast to grow 9.6%, in line with its 11% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.4% next year. So although Hooker Furniture is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hooker Furniture's earnings potential next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$44.00, with the latest estimates not enough to have an impact on their price target.

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 2023, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Hooker Furniture that you should be aware of.

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