Kimball Electronics, Inc. Just Beat EPS By 27%: Here's What Analysts Think Will Happen Next

Kimball Electronics, Inc. (NASDAQ:KE) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to US$17.41 in the week after its latest second-quarter results. Revenues were US$357m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.14, an impressive 27% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kimball Electronics after the latest results.

See our latest analysis for Kimball Electronics

Taking into account the latest results, the current consensus, from the four analysts covering Kimball Electronics, is for revenues of US$1.41b in 2025. This implies an uncomfortable 11% reduction in Kimball Electronics' revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 63% to US$0.53. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.48b and earnings per share (EPS) of US$0.74 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to US$21.25. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Kimball Electronics, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$14.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 21% by the end of 2025. This indicates a significant reduction from annual growth of 9.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.4% annually for the foreseeable future. It's pretty clear that Kimball Electronics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Kimball Electronics' future valuation.

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 Kimball Electronics analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Kimball Electronics 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.