Yahoo Finance Earnings Beat: Build-A-Bear Workshop, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Shareholders will be ecstatic, with their stake up 24% over the past week following Build-A-Bear Workshop, Inc.'s (NYSE:BBW) latest annual results. Build-A-Bear Workshop reported US$486m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.65 beat expectations, being 7.0% higher than what the analysts expected. 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 Build-A-Bear Workshop after the latest results.
Check out our latest analysis for Build-A-Bear Workshop
Following last week's earnings report, Build-A-Bear Workshop's three analysts are forecasting 2025 revenues to be US$487.6m, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 2.7% to US$3.68 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$503.0m and earnings per share (EPS) of US$3.78 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
The analysts made no major changes to their price target of US$39.00, suggesting the downgrades are not expected to have a long-term impact on Build-A-Bear Workshop's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Build-A-Bear Workshop, with the most bullish analyst valuing it at US$41.00 and the most bearish at US$36.00 per share. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Build-A-Bear Workshop's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Build-A-Bear Workshop's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.3% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Build-A-Bear Workshop is also expected to grow slower than other industry participants.
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 held steady at US$39.00, with the latest estimates not enough to have an impact on their price targets.
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 estimates - from multiple Build-A-Bear Workshop analysts - going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Build-A-Bear Workshop that we have uncovered.
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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.
