Here's What Analysts Are Forecasting For a.k.a. Brands Holding Corp. (NYSE:AKA) After Its Second-Quarter Results

A week ago, a.k.a. Brands Holding Corp. (NYSE:AKA) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. a.k.a. Brands Holding outperformed estimates, with revenues of US$149m beating estimates by 10%. Statutory losses were US$0.22, 31% smaller thanthe analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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

Taking into account the latest results, a.k.a. Brands Holding's five analysts currently expect revenues in 2024 to be US$563.2m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 83% to US$1.58. Before this earnings announcement, the analysts had been modelling revenues of US$550.6m and losses of US$1.64 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for this year.

Despite these upgrades,the analysts have not made any major changes to their price target of US$21.75, implying that their latest estimates don't have a long term impact on what they think the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on a.k.a. Brands Holding, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$20.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting a.k.a. Brands Holding is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the a.k.a. Brands Holding's past performance and to peers in the same industry. 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 2024 expected to display 2.8% growth on an annualised basis. This is compared to a historical growth rate of 4.3% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.8% 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 a.k.a. Brands Holding.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at US$21.75, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple a.k.a. Brands Holding analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - a.k.a. Brands Holding has 2 warning signs (and 1 which is a bit concerning) we think 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.