Simpson Manufacturing Co., Inc. (NYSE:SSD) shareholders are probably feeling a little disappointed, since its shares fell 5.4% to US$182 in the week after its latest quarterly results. It looks like the results were a bit of a negative overall. While revenues of US$587m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.1% to hit US$2.21 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Simpson Manufacturing after the latest results.

Check out our latest analysis for Simpson Manufacturing

Taking into account the latest results, the consensus forecast from Simpson Manufacturing's three analysts is for revenues of US$2.33b in 2025. This reflects a credible 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 12% to US$8.55. In the lead-up to this report, the analysts had been modelling revenues of US$2.37b and earnings per share (EPS) of US$9.14 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at US$198, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Simpson Manufacturing at US$218 per share, while the most bearish prices it at US$180. This is a very narrow spread of estimates, implying either that Simpson Manufacturing is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Simpson Manufacturing's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this to the 48 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.5% per year. So it's pretty clear that, while Simpson Manufacturing's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Simpson Manufacturing. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$198, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Simpson Manufacturing going out to 2025, 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 Simpson Manufacturing 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.