Last week, you might have seen that Kimball Electronics, Inc. (NASDAQ:KE) released its quarterly result to the market. The early response was not positive, with shares down 3.9% to US$17.41 in the past week. It looks like a credible result overall - although revenues of US$357m were what the analysts expected, Kimball Electronics surprised by delivering a (statutory) profit of US$0.14 per share, an impressive 27% above what was forecast. 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.

View our latest analysis for Kimball Electronics

Taking into account the latest results, the current consensus, from the four analysts covering Kimball Electronics, is for revenues of US$1.41b in 2025. This implies a definite 11% reduction in Kimball Electronics' revenue over the past 12 months. Per-share earnings are expected to surge 63% to US$0.53. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.48b and earnings per share (EPS) of US$0.74 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 11% to US$21.25, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Kimball Electronics analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$14.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kimball Electronics' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 21% annualised decline to the end of 2025. That is a notable change from historical growth of 9.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.4% per year. It's pretty clear that Kimball Electronics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kimball Electronics. 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 2 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.