Red Robin Gourmet Burgers, Inc. Beat Analyst Profit Forecasts, And Analysts Have New Estimates

Shareholders of Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) will be pleased this week, given that the stock price is up 18% to US$6.72 following its latest quarterly results. It looks like a credible result overall - although revenues of US$284m were what the analysts expected, Red Robin Gourmet Burgers surprised by delivering a statutory profit of US$0.21 per share, instead of the previously forecast loss. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus, from the four analysts covering Red Robin Gourmet Burgers, is for revenues of US$1.20b in 2025. This implies a small 3.3% reduction in Red Robin Gourmet Burgers' revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 63% to US$1.10. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.21b and losses of US$1.11 per share in 2025.

See our latest analysis for Red Robin Gourmet Burgers

The average price target fell 11% to US$11.00, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Red Robin Gourmet Burgers, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$6.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 6.4% annualised decline to the end of 2025. That is a notable change from historical growth of 5.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Red Robin Gourmet Burgers is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Red Robin Gourmet Burgers' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Red Robin Gourmet Burgers. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Red Robin Gourmet Burgers analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Red Robin Gourmet Burgers (1 shouldn't be ignored) 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.