ScanSource, Inc. Just Missed EPS By 27%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on ScanSource, Inc. (NASDAQ:SCSC), given that the company fell short of expectations when it released its quarterly results last week. Results showed a clear earnings miss, with US$753m revenue coming in 8.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.50 missed the mark badly, arriving some 27% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for ScanSource


Taking into account the latest results, ScanSource's three analysts currently expect revenues in 2025 to be US$3.48b, approximately in line with the last 12 months. Statutory per share are forecast to be US$3.10, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$3.68b and earnings per share (EPS) of US$3.48 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.


What's most unexpected is that the consensus price target rose 11% to US$46.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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$50.00 and the most bearish at US$42.00 per share. This is a very narrow spread of estimates, implying either that ScanSource is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that ScanSource's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.5% growth on an annualised basis. This is compared to a historical growth rate of 3.9% 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 6.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that ScanSource 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on ScanSource. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ScanSource going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for ScanSource you should know about.

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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.