The The Aaron's Company, Inc. (NYSE:AAN) First-Quarter Results Are Out And Analysts Have Published New Forecasts

Investors in The Aaron's Company, Inc. (NYSE:AAN) had a good week, as its shares rose 7.4% to close at US$7.28 following the release of its quarterly results. Revenues were in line with expectations, at US$511m, while statutory losses ballooned to US$0.46 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Aaron's Company

Following last week's earnings report, Aaron's Company's six analysts are forecasting 2024 revenues to be US$2.12b, approximately in line with the last 12 months. Statutory losses are forecast to balloon 91% to US$0.07 per share. In the lead-up to this report, the analysts had been modelling revenues of US$2.12b and earnings per share (EPS) of US$0.83 in 2024. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.

The consensus price target held steady at US$8.40, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Aaron's Company, with the most bullish analyst valuing it at US$11.00 and the most bearish at US$7.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Aaron's Company's revenue growth is expected to slow, with the forecast 1.2% annualised growth rate until the end of 2024 being well below the historical 8.2% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Aaron's Company.

The Bottom Line

The biggest low-light for us was that the forecasts for Aaron's Company dropped from profits to a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Aaron's Company's 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.

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 estimates - from multiple Aaron's Company analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Aaron's Company 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.