Analysts Are Updating Their Patterson Companies, Inc. (NASDAQ:PDCO) Estimates After Its Annual Results

It's been a good week for Patterson Companies, Inc. (NASDAQ:PDCO) shareholders, because the company has just released its latest yearly results, and the shares gained 5.5% to US$24.14. Patterson Companies reported in line with analyst predictions, delivering revenues of US$6.6b and statutory earnings per share of US$1.98, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Patterson Companies after the latest results.

View our latest analysis for Patterson Companies

Taking into account the latest results, the current consensus from Patterson Companies' twelve analysts is for revenues of US$6.73b in 2025. This would reflect an okay 2.5% increase on its revenue over the past 12 months. Statutory earnings per share are expected to dip 2.9% to US$2.06 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$6.74b and earnings per share (EPS) of US$2.10 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$28.45, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. There are some variant perceptions on Patterson Companies, with the most bullish analyst valuing it at US$31.00 and the most bearish at US$25.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that Patterson Companies' revenue growth is expected to slow, with the forecast 2.5% annualised growth rate until the end of 2025 being well below the historical 4.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Patterson Companies is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Patterson Companies' revenue is expected to perform worse 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Patterson Companies going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Patterson Companies has 3 warning signs (and 2 which are potentially serious) we think you should know about.

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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