Shareholders might have noticed that The ONE Group Hospitality, Inc. (NASDAQ:STKS) filed its third-quarter result this time last week. The early response was not positive, with shares down 8.0% to US$3.16 in the past week. It looks like a pretty bad result, given that revenues fell 10% short of analyst estimates at US$194m, and the company reported a statutory loss of US$0.52 per share instead of the profit that the analysts had been forecasting. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for ONE Group Hospitality

Taking into account the latest results, the consensus forecast from ONE Group Hospitality's three analysts is for revenues of US$869.7m in 2025. This reflects a substantial 61% improvement in revenue compared to the last 12 months. Per-share statutory losses are expected to explode, reaching US$0.093 per share. Before this earnings report, the analysts had been forecasting revenues of US$958.4m and earnings per share (EPS) of US$0.55 in 2025. The analysts have made an abrupt about-face on ONE Group Hospitality, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.

The consensus price target fell 36% to US$5.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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 ONE Group Hospitality, with the most bullish analyst valuing it at US$6.00 and the most bearish at US$3.50 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 clear from the latest estimates that ONE Group Hospitality's rate of growth is expected to accelerate meaningfully, with the forecast 46% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 27% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ONE Group Hospitality is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting ONE Group Hospitality to become unprofitable next year. They also downgraded ONE Group Hospitality's revenue estimates, but industry data suggests that it is expected to grow faster 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 ONE Group Hospitality's future valuation.

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 ONE Group Hospitality analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that ONE Group Hospitality is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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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.