Simpson Manufacturing Co., Inc. (NYSE:SSD) just released its latest second-quarter results and things are looking bullish. The company beat expectations with revenues of US$631m arriving 5.3% ahead of forecasts. Statutory earnings per share (EPS) were US$2.47, 9.1% 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Simpson Manufacturing's three analysts is for revenues of US$2.32b in 2025. This reflects an okay 2.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 4.3% to US$8.24. Before this earnings report, the analysts had been forecasting revenues of US$2.29b and earnings per share (EPS) of US$8.07 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for Simpson Manufacturing
The consensus price target was unchanged at US$190, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Simpson Manufacturing at US$195 per share, while the most bearish prices it at US$185. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. We would highlight that Simpson Manufacturing's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Simpson Manufacturing is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Simpson Manufacturing's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$190, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Simpson Manufacturing analysts - going out to 2026, and you can see them free on our platform here.
You can also see whether Simpson Manufacturing is carrying too much debt, and whether its balance sheet is healthy, for free 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.