Need To Know: Analysts Are Much More Bullish On Tilly's, Inc. (NYSE:TLYS)

Celebrations may be in order for Tilly's, Inc. (NYSE:TLYS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investors have been pretty optimistic on Tilly's too, with the stock up 11% to US$15.78 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the latest consensus from Tilly's' four analysts is for revenues of US$713m in 2022, which would reflect a meaningful 15% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 43% to US$1.31. Prior to this update, the analysts had been forecasting revenues of US$630m and earnings per share (EPS) of US$0.72 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Tilly's

With these upgrades, we're not surprised to see that the analysts have lifted their price target 35% to US$19.33 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Tilly's at US$21.00 per share, while the most bearish prices it at US$17.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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. It's clear from the latest estimates that Tilly's' rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 0.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Tilly's is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Tilly's.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Tilly's analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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