Results: Grocery Outlet Holding Corp. Beat Earnings Expectations And Analysts Now Have New Forecasts

The full-year results for Grocery Outlet Holding Corp. (NASDAQ:GO) were released last week, making it a good time to revisit its performance. Grocery Outlet Holding reported US$4.0b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.79 beat expectations, being 6.9% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Grocery Outlet Holding

Taking into account the latest results, the consensus forecast from Grocery Outlet Holding's twelve analysts is for revenues of US$4.34b in 2024. This reflects a decent 9.4% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$0.82, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$4.30b and earnings per share (EPS) of US$0.78 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$31.27, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Grocery Outlet Holding analyst has a price target of US$43.00 per share, while the most pessimistic values it at US$23.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 9.4% growth on an annualised basis. That is in line with its 10% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.5% annually. So although Grocery Outlet Holding is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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 Grocery Outlet Holding's earnings potential next year. 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. The consensus price target held steady at US$31.27, with the latest estimates not enough to have an impact on their price targets.

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 Grocery Outlet Holding going out to 2026, and you can see them free on our platform here..

You can also view our analysis of Grocery Outlet Holding's balance sheet, and whether we think Grocery Outlet Holding is carrying too much debt, for free on our platform here.

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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.