RF Industries, Ltd. just beat revenue estimates by 9.1%
RF Industries, Ltd. (NASDAQ:RFIL) Shareholders are likely feeling a bit disappointed, as its shares fell 6.5% to US$6.35 in the week after its latest third-quarter results. It was a professional result, with revenue of US$24 million beating expectations by 9.1% and statutory earnings per share of US$0.08, in line with analysts’ assessments. This is an important time for investors, as they can follow a company’s performance in its report, see what the expert predicts for next year, and see if there has been any change in company expectations. We’ve rounded up the most recent statutory forecasts to see if the analyst has changed their earnings models as a result of these results.
See our latest analysis for RF Industries
Based on the latest results, RF Industries’ sole analyst consensus forecast calls for revenue of $91.2 million in 2023, which would reflect a notable 9.4% improvement in sales over the past 12 months. Statutory earnings per share are expected to climb 130% to US$0.41. Yet prior to the latest results, the analyst had forecast revenue of US$87.6 million and earnings per share (EPS) of US$0.37 in 2023. So it seems there has been a clear increased optimism about the future of RF Industries following the latest results, including a nice rise in earnings per share forecasts.
As a result, it might come as a surprise to see that the analyst cut his price target by 10.0% to US$9.00, which might suggest that the predicted improvement in performance may not last.
Of course, another way to look at these predictions is to put them in context with the industry itself. We emphasize that RF Industries revenue growth is expected to slow, with the projected annualized growth rate of 7.5% through the end of 2023 being well below the historical growth of 15% per year over the past five years. Juxtapose that to other companies in the industry with analyst coverage, which are expected to grow revenue (in total) by 6.7% annually. Taking into account the expected slowdown in growth, it looks like RF Industries should grow at about the same rate as the industry at large.
The most important thing here is that the analyst has updated its earnings per share estimates, suggesting that there has been a marked increase in optimism towards RF Industries following these results. They also updated their revenue guidance, although the latest estimates suggest RF Industries will grow in line with the overall industry. Additionally, the analyst also cut his price targets, suggesting that the latest news has led to greater pessimism about the company’s intrinsic value.
Continuing this thinking, we believe that the company’s long-term outlook is much more relevant than next year’s results. We have analyst estimates for RF Industries out to 2023, and you can view them for free on our platform here.
It should also be noted that we found 2 warning signs for RF Industries that you need to consider.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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