Earnings Miss: Patterson Companies, Inc. Missed EPS By 28% And Analysts Are Revising Their Forecasts

Investors in Patterson Companies, Inc. (NASDAQ:PDCO) had a good week, as its shares rose 6.7% to close at US$22.92 following the release of its second-quarter results. It looks like a pretty bad result, all things considered. Although revenues of US$1.7b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 28% to hit US$0.30 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Patterson Companies

Taking into account the latest results, Patterson Companies' ten analysts currently expect revenues in 2025 to be US$6.62b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 5.3% to US$1.85. In the lead-up to this report, the analysts had been modelling revenues of US$6.61b and earnings per share (EPS) of US$2.00 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$25.55, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Patterson Companies analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$23.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Patterson Companies is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Patterson Companies' past performance and to peers in the same industry. We would highlight that Patterson Companies' revenue growth is expected to slow, with the forecast 1.9% annualised growth rate until the end of 2025 being well below the historical 4.0% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.0% per year. 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Patterson Companies. 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.

Before you take the next step you should know about the 3 warning signs for Patterson Companies (2 are potentially serious!) 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.