CarParts.com, Inc. (NASDAQ:PRTS) Just Reported Earnings, And Analysts Cut Their Target Price

As you might know, CarParts.com, Inc. (NASDAQ:PRTS) last week released its latest quarterly, and things did not turn out so great for shareholders. Revenues missed expectations somewhat, coming in at US$144m, but statutory earnings fell catastrophically short, with a loss of US$0.15 some 50% larger than what the analysts had predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for CarParts.com

After the latest results, the consensus from CarParts.com's twin analysts is for revenues of US$591.1m in 2024, which would reflect a small 6.7% decline in revenue compared to the last year of performance. Per-share losses are predicted to creep up to US$0.46. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$604.7m and losses of US$0.39 per share in 2024. While this year's revenue estimates dropped there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The average price target fell 29% to US$1.65, implicitly signalling that lower earnings per share are a leading indicator for CarParts.com's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 13% by the end of 2024. This indicates a significant reduction from annual growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CarParts.com is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for CarParts.com (1 is a bit unpleasant!) that you need to be mindful of.

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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