Kimball Electronics, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Kimball Electronics, Inc. (NASDAQ:KE) shareholders are probably feeling a little disappointed, since its shares fell 9.5% to US$18.41 in the week after its latest full-year results. Revenues were in line with forecasts, at US$1.7b, although statutory earnings per share came in 12% below what the analysts expected, at US$0.81 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Kimball Electronics

Taking into account the latest results, the five analysts covering Kimball Electronics provided consensus estimates of US$1.48b revenue in 2025, which would reflect an uneasy 14% decline over the past 12 months. Per-share earnings are expected to shoot up 28% to US$1.06. In the lead-up to this report, the analysts had been modelling revenues of US$1.79b and earnings per share (EPS) of US$1.83 in 2025. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a large cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 22% to US$22.60. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Kimball Electronics, with the most bullish analyst valuing it at US$29.00 and the most bearish at US$19.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kimball Electronics shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kimball Electronics' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2025. This indicates a significant reduction from annual growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kimball Electronics is expected to lag 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 forecasts for Kimball Electronics 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 3 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.