Alico, Inc. Just Missed EPS By 62%: Here's What Analysts Think Will Happen Next

Alico, Inc. (NASDAQ:ALCO) just released its latest third-quarter report and things are not looking great. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$26m missed by 10%, and statutory earnings per share of US$0.36 fell short of forecasts by 62%. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is 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 analyst latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Alico

Taking into account the latest results, the most recent consensus for Alico from lone analyst is for revenues of US$104.5m in 2023 which, if met, would be a meaningful 10% increase on its sales over the past 12 months. Statutory earnings per share are forecast to plummet 82% to US$0.78 in the same period. Before this earnings report, the analyst had been forecasting revenues of US$114.0m and earnings per share (EPS) of US$0.83 in 2023. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the US$43.00 price target, showing that the analyst doesn't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Alico's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 8.0% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 2.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.4% annually. So it looks like Alico is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Alico. They also downgraded their revenue estimates, although industry data suggests that Alico's revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$43.00, with the latest estimates not enough to have an impact on their price target.

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. We have analyst estimates for Alico going out as far as 2023, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Alico (1 is significant!) that you need to be mindful 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.