Regis Corporation (NYSE:RGS) Released Earnings Last Week And Analysts Lifted Their Price Target To US$11.00

Regis Corporation (NYSE:RGS) just released its latest second-quarter report and things are not looking great. Unfortunately, Regis delivered a serious earnings miss. Revenues of US$104m were 19% below expectations, and statutory losses ballooned 475% to US$0.92 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Regis

Taking into account the latest results, the current consensus from Regis' two analysts is for revenues of US$482.7m in 2021, which would reflect a solid 12% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 84% to US$0.95. Before this earnings announcement, the analysts had been modelling revenues of US$477.4m and losses of US$0.94 per share in 2021. So it's pretty clear consensus is mixed on Regis after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a pronounced increase to per-share loss expectations.

Despite expectations of heavier losses next year,the analysts have lifted their price target 10% to US$11.00, perhaps implying these losses are not expected to be recurring over the long term.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Regis' past performance and to peers in the same industry. For example, we noticed that Regis' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 12%, well above its historical decline of 19% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 21% next year. Although Regis' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Regis. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will 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.

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 2025, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Regis you should be aware of.

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