Latest news with #Leslie's'
Yahoo
11-05-2025
- Business
- Yahoo
Leslie's, Inc. (NASDAQ:LESL) Just Reported, And Analysts Assigned A US$1.46 Price Target
Leslie's, Inc. (NASDAQ:LESL) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Leslie's missed analyst estimates, with revenues of US$177m and a statutory loss per share (eps) of US$0.28 falling 4.3% and 8.7% below expectations, respectively. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year. We've discovered 3 warning signs about Leslie's. View them for free. Taking into account the latest results, Leslie's' twelve analysts currently expect revenues in 2025 to be US$1.33b, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 94% to US$0.015. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.34b and losses of US$0.013 per share in 2025. So it's pretty clear the analysts have mixed opinions on Leslie's even after this update; although they reconfirmed their revenue numbers, it came at the cost of a notable increase in per-share losses. See our latest analysis for Leslie's With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 34% to US$1.46, with the analysts signalling that growing losses would be a definite concern. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Leslie's, with the most bullish analyst valuing it at US$3.00 and the most bearish at US$0.55 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates. Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Leslie's' revenue growth is expected to slow, with the forecast 2.1% annualised growth rate until the end of 2025 being well below the historical 3.8% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Leslie's is also expected to grow slower than other industry participants. The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Leslie's. On the plus side, there were no major changes to revenue estimates; although 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 Leslie's' future valuation. With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Leslie's going out to 2027, and you can see them free on our platform here. However, before you get too enthused, we've discovered 3 warning signs for Leslie's (2 are a bit concerning!) that you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
26-04-2025
- Business
- Yahoo
The Returns On Capital At Leslie's (NASDAQ:LESL) Don't Inspire Confidence
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. Although, when we looked at Leslie's (NASDAQ:LESL), it didn't seem to tick all of these boxes. We've discovered 3 warning signs about Leslie's. View them for free. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Leslie's: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.082 = US$63m ÷ (US$967m - US$194m) (Based on the trailing twelve months to December 2024). So, Leslie's has an ROCE of 8.2%. In absolute terms, that's a low return and it also under-performs the Specialty Retail industry average of 13%. View our latest analysis for Leslie's In the above chart we have measured Leslie's' prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Leslie's . When we looked at the ROCE trend at Leslie's, we didn't gain much confidence. Over the last five years, returns on capital have decreased to 8.2% from 40% five years ago. However it looks like Leslie's might be reinvesting for long term growth because while capital employed has increased, the company's sales haven't changed much in the last 12 months. It may take some time before the company starts to see any change in earnings from these investments. On a related note, Leslie's has decreased its current liabilities to 20% of total assets. So we could link some of this to the decrease in ROCE. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money. In summary, Leslie's is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. And investors may be expecting the fundamentals to get a lot worse because the stock has crashed 97% over the last three years. All in all, the inherent trends aren't typical of multi-baggers, so if that's what you're after, we think you might have more luck elsewhere. If you want to know some of the risks facing Leslie's we've found 3 warning signs (2 are significant!) that you should be aware of before investing here. While Leslie's may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
