Results: ScanSource, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Shareholders might have noticed that ScanSource, Inc. (NASDAQ:SCSC) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.4% to US$40.60 in the past week. Revenues of US$740m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$0.89 an impressive 24% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ScanSource after the latest results.

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Following the latest results, ScanSource's three analysts are now forecasting revenues of US$3.14b in 2026. This would be a satisfactory 4.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 3.4% to US$3.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.18b and earnings per share (EPS) of US$3.39 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for ScanSource

The consensus price target rose 6.0% to US$53.00, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on ScanSource, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$43.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ScanSource's past performance and to peers in the same industry. It's clear from the latest estimates that ScanSource's rate of growth is expected to accelerate meaningfully, with the forecast 6.2% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 0.07% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 10% annually. So it's clear that despite the acceleration in growth, ScanSource is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ScanSource's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that ScanSource's revenue is expected to perform worse 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.

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 ScanSource going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for ScanSource that you should be aware of.

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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.