Here's What Analysts Are Forecasting For The Simply Good Foods Company (NASDAQ:SMPL) After Its Third-Quarter Results

Last week, you might have seen that The Simply Good Foods Company (NASDAQ:SMPL) released its third-quarter result to the market. The early response was not positive, with shares down 2.2% to US$36.13 in the past week. Results were roughly in line with estimates, with revenues of US$335m and statutory earnings per share of US$0.41. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Simply Good Foods

After the latest results, the ten analysts covering Simply Good Foods are now predicting revenues of US$1.47b in 2025. If met, this would reflect a notable 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 10% to US$1.61. Before this earnings report, the analysts had been forecasting revenues of US$1.51b and earnings per share (EPS) of US$2.05 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The analysts made no major changes to their price target of US$40.00, suggesting the downgrades are not expected to have a long-term impact on Simply Good Foods' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Simply Good Foods at US$49.00 per share, while the most bearish prices it at US$34.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Simply Good Foods' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.0% annually. So it's pretty clear that, while Simply Good Foods' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Simply Good Foods. They also downgraded Simply Good Foods' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Simply Good Foods going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Simply Good Foods' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com