a.k.a. Brands Holding Corp. (NYSE:AKA) Analysts Are Pretty Bullish On The Stock After Recent Results

It's been a good week for a.k.a. Brands Holding Corp. (NYSE:AKA) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.7% to US$24.62. The results don't look great, especially considering that statutory losses grew 159% toUS$0.51 per share. Revenues of US$150m did beat expectations by 4.8%, but it looks like a bit of a cold comfort. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on a.k.a. Brands Holding after the latest results.

Check out our latest analysis for a.k.a. Brands Holding

Taking into account the latest results, the consensus forecast from a.k.a. Brands Holding's four analysts is for revenues of US$594.5m in 2025. This reflects a satisfactory 5.3% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 97% to US$0.08. Before this earnings announcement, the analysts had been modelling revenues of US$584.4m and losses of US$0.88 per share in 2025. Although the revenue estimates have not really changed a.k.a. Brands Holding'sfuture looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.

The average price target rose 16% to US$26.00, with the analysts signalling that the forecast reduction in losses would be a positive for the stock'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. Currently, the most bullish analyst values a.k.a. Brands Holding at US$30.00 per share, while the most bearish prices it at US$20.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that a.k.a. Brands Holding's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this to the 148 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.8% per year. Factoring in the forecast slowdown in growth, it looks like a.k.a. Brands Holding is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 a.k.a. Brands Holding analysts - going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for a.k.a. Brands Holding you should be aware of, and 1 of them is potentially serious.

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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.