The analysts might have been a bit too bullish on Transcat, Inc. (NASDAQ:TRNS), given that the company fell short of expectations when it released its quarterly results last week. Results showed a clear earnings miss, with US$68m revenue coming in 3.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.35 missed the mark badly, arriving some 24% 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Transcat

Taking into account the latest results, the most recent consensus for Transcat from five analysts is for revenues of US$279.6m in 2025. If met, it would imply a reasonable 3.3% increase on its revenue over the past 12 months. Statutory earnings per share are expected to sink 11% to US$1.74 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$283.5m and earnings per share (EPS) of US$2.06 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The average price target fell 15% to US$123, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. The most optimistic Transcat analyst has a price target of US$144 per share, while the most pessimistic values it at US$110. This is a very narrow spread of estimates, implying either that Transcat is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Transcat's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.7% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this to the 59 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.4% per year. Factoring in the forecast slowdown in growth, it looks like Transcat is forecast to grow at about the same rate as the wider industry.

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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Transcat. 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 Transcat going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Transcat 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.