Stock Analysis

Express, Inc. (NYSE:EXPR) Analysts Are Pretty Bullish On The Stock After Recent Results

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NYSE:EXPR
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Shareholders will be ecstatic, with their stake up 80% over the past week following Express, Inc.'s (NYSE:EXPR) latest full-year results. Revenues came in at US$1.2b, in line with forecasts and the company reported a statutory loss of US$0.82 per share, roughly in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Express

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NYSE:EXPR Earnings and Revenue Growth March 13th 2021

After the latest results, the three analysts covering Express are now predicting revenues of US$1.67b in 2022. If met, this would reflect a substantial 39% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 79% to US$1.34. Before this earnings announcement, the analysts had been modelling revenues of US$1.66b and losses of US$0.32 per share in 2022. So it's pretty clear the analysts have mixed opinions on Express even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.

Despite expectations of heavier losses next year,the analysts have lifted their price target 47% to US$2.08, perhaps implying these losses are not expected to be recurring over the long term. 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. Currently, the most bullish analyst values Express at US$3.50 per share, while the most bearish prices it at US$1.25. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Express is forecast to grow faster in the future than it has in the past, with revenues expected to display 39% annualised growth until the end of 2022. If achieved, this would be a much better result than the 8.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 11% per year. So it looks like Express is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than 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.

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 Express analysts - going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Express (1 is significant!) that we have uncovered.

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What are the risks and opportunities for Express?

Express, Inc. provides apparel and accessories for women and men for various occasions under the Express brand.

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Risks

  • Earnings have declined by 25.5% per year over past 5 years

  • Highly volatile share price over the past 3 months

  • Does not have a meaningful market cap ($85M)

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