Shareholders might have noticed that Kimball Electronics, Inc. (NASDAQ:KE) filed its full-year result this time last week. The early response was not positive, with shares down 9.5% to US$18.41 in the past week. It was not a great result overall. While revenues of US$1.7b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit US$0.81 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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 jump 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. Indeed, we can see that the analysts are a lot more bearish about Kimball Electronics' prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 22% to US$22.60, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Kimball Electronics at US$29.00 per share, while the most bearish prices it at US$19.00. 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.
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. 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. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.4% annually for the foreseeable future. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Kimball Electronics' future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Kimball Electronics going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Kimball Electronics 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.