The Vita Coco Company, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

As you might know, The Vita Coco Company, Inc. (NASDAQ:COCO) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 5.4% to hit US$110m. Vita Coco Company also reported a statutory profit of US$0.12, which was an impressive 100% above what the analysts had forecast. 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 Vita Coco Company

Following the latest results, Vita Coco Company's six analysts are now forecasting revenues of US$478.1m in 2023. This would be a notable 8.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 219% to US$0.70. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$473.2m and earnings per share (EPS) of US$0.62 in 2023. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target rose 19% to US$26.33, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Vita Coco Company at US$30.00 per share, while the most bearish prices it at US$25.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 10% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.3% per year. So although Vita Coco Company 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 Vita Coco Company's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Vita Coco Company. Long-term earnings power is much more important than next year's profits. We have forecasts for Vita Coco Company going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Vita Coco Company that we have uncovered.

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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.