Earnings Update: Here's Why Analysts Just Lifted Their Zumiez Inc. (NASDAQ:ZUMZ) Price Target To US$18.00

The investors in Zumiez Inc.'s (NASDAQ:ZUMZ) will be rubbing their hands together with glee today, after the share price leapt 24% to US$21.31 in the week following its second-quarter results. Revenues of US$214m arrived in line with expectations, although statutory losses per share were US$0.06, an impressive 44% smaller than what broker models 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the most recent consensus for Zumiez from three analysts is for revenues of US$919.7m in 2026. If met, it would imply a reasonable 2.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 1,170% to US$0.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$901.3m and earnings per share (EPS) of US$0.21 in 2026. So it seems there's been a definite increase in optimism about Zumiez's future following the latest results, with a great increase in the earnings per share forecasts in particular.

See our latest analysis for Zumiez

With these upgrades, we're not surprised to see that the analysts have lifted their price target 29% to US$18.00per share.

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. One thing stands out from these estimates, which is that Zumiez is forecast to grow faster in the future than it has in the past, with revenues expected to display 4.4% annualised growth until the end of 2026. If achieved, this would be a much better result than the 5.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.7% per year. So although Zumiez's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zumiez's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Zumiez going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Zumiez , and understanding these should be part of your investment process.

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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.