Gladstone Commercial Corporation (NASDAQ:GOOD) Just Released Its Annual Results And Analysts Are Updating Their Estimates

Gladstone Commercial Corporation (NASDAQ:GOOD) shareholders are probably feeling a little disappointed, since its shares fell 2.7% to US$15.82 in the week after its latest full-year results. The result was positive overall - although revenues of US$149m were in line with what the analysts predicted, Gladstone Commercial surprised by delivering a statutory profit of US$0.27 per share, modestly greater than expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Gladstone Commercial

Taking into account the latest results, Gladstone Commercial's four analysts currently expect revenues in 2025 to be US$151.2m, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 8.6% to US$0.23 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$152.8m and earnings per share (EPS) of US$0.27 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$17.10, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Gladstone Commercial at US$18.00 per share, while the most bearish prices it at US$16.00. This is a very narrow spread of estimates, implying either that Gladstone Commercial is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Gladstone Commercial's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Gladstone Commercial's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 4.4% 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 4.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Gladstone Commercial.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Gladstone Commercial. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Gladstone Commercial's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$17.10, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Gladstone Commercial analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Gladstone Commercial (of which 1 doesn't sit too well with us!) 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.