Citi Trends, Inc. (NASDAQ:CTRN) Just Reported, And Analysts Assigned A US$23.00 Price Target

Shareholders might have noticed that Citi Trends, Inc. (NASDAQ:CTRN) filed its second-quarter result this time last week. The early response was not positive, with shares down 4.5% to US$14.47 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at US$177m, statutory losses exploded to US$2.21 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Citi Trends after the latest results.

View our latest analysis for Citi Trends

After the latest results, the consensus from Citi Trends' three analysts is for revenues of US$741.6m in 2025, which would reflect a measurable 2.1% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$3.29 per share. Before this latest report, the consensus had been expecting revenues of US$752.9m and US$1.02 per share in losses. So it's pretty clear the analysts have mixed opinions on Citi Trends even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 26% to US$23.00, with the analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Citi Trends analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$14.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Over the past five years, revenues have declined around 0.3% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 4.2% decline in revenue until the end of 2025. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.9% annually. So while a broad number of companies are forecast to grow, unfortunately Citi Trends is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Citi Trends' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Citi Trends. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Citi Trends analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Citi Trends is showing 1 warning sign in our investment analysis , 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.