Last week saw the newest yearly earnings release from Utz Brands, Inc. (NYSE:UTZ), an important milestone in the company's journey to build a stronger business. It was an okay result overall, with revenues coming in at US$964m, roughly what the analysts had been expecting. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Utz Brands after the latest results.
Taking into account the latest results, the consensus forecast from Utz Brands' five analysts is for revenues of US$1.16b in 2021, which would reflect a substantial 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 1,156% to US$0.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.16b and earnings per share (EPS) of US$0.31 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.
There's been no major changes to the consensus price target of US$25.89, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Utz Brands at US$29.00 per share, while the most bearish prices it at US$20.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Utz Brands' revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2021 being well below the historical 139% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.1% per year. Even after the forecast slowdown in growth, it seems obvious that Utz Brands is also 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 Utz Brands' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$25.89, with the latest estimates not enough to have an impact on their price targets.
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 Utz Brands going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 3 warning signs for Utz Brands (1 shouldn't be ignored!) that you need to take into consideration.
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