Shareholders might have noticed that GMS Inc. (NYSE:GMS) filed its third-quarter result this time last week. The early response was not positive, with shares down 7.0% to US$74.02 in the past week. It was a pretty negative result overall, with revenues of US$1.3b missing analyst predictions by 2.5%. Worse, the business reported a statutory loss of US$0.55 per share, a substantial decline on analyst expectations of a profit. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for GMS

Following last week's earnings report, GMS' eight analysts are forecasting 2026 revenues to be US$5.48b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$3.87, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.80b and earnings per share (EPS) of US$6.31 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 15% to US$83.33. 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. Currently, the most bullish analyst values GMS at US$111 per share, while the most bearish prices it at US$65.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.6% by the end of 2026. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.4% annually for the foreseeable future. It's pretty clear that GMS' revenues are expected to perform substantially worse than 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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 GMS. Long-term earnings power is much more important than next year's profits. We have forecasts for GMS 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 2 warning signs for GMS 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.