The quarterly results for Monro, Inc. (NASDAQ:MNRO) were released last week, making it a good time to revisit its performance. It looks like a pretty bad result, all things considered. Although revenues of US$301m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 37% to hit US$0.18 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Monro after the latest results.

Following last week's earnings report, Monro's five analysts are forecasting 2025 revenues to be US$1.21b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 9.7% to US$0.79 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.20b and earnings per share (EPS) of US$0.98 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 17% to US$29.33, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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. The most optimistic Monro analyst has a price target of US$31.00 per share, while the most pessimistic values it at US$27.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 2.5% by the end of 2025. This indicates a significant reduction from annual growth of 1.5% 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 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Monro is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Monro. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Monro. Long-term earnings power is much more important than next year's profits. We have forecasts for Monro going out to 2026, and you can see them free on our platform here.

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.