Earnings Beat: ScanSource, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a pretty great week for ScanSource, Inc. (NASDAQ:SCSC) shareholders, with its shares surging 16% to US$39.83 in the week since its latest third-quarter results. ScanSource missed revenue estimates by 9.4%, coming in atUS$705m, although statutory earnings per share (EPS) of US$0.74 beat expectations, coming in 9.6% ahead of analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the latest results, ScanSource's four analysts are now forecasting revenues of US$3.16b in 2026. This would be a reasonable 6.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 8.4% to US$3.24. In the lead-up to this report, the analysts had been modelling revenues of US$3.34b and earnings per share (EPS) of US$3.27 in 2026. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

See our latest analysis for ScanSource

The average price target was steady at US$48.67even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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 ScanSource at US$58.00 per share, while the most bearish prices it at US$42.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting ScanSource's growth to accelerate, with the forecast 5.0% annualised growth to the end of 2026 ranking favourably alongside historical growth of 2.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.3% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, ScanSource is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$48.67, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on ScanSource. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ScanSource going out to 2027, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.