Earnings Release: Here's Why Analysts Cut Their Ranpak Holdings Corp. (NYSE:PACK) Price Target To US$5.58
It's shaping up to be a tough period for Ranpak Holdings Corp. (NYSE:PACK), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. It was a pretty negative result overall, with revenues of US$102m missing analyst predictions by 6.4%. Additionally, the business reported a statutory loss of US$0.08 per share, larger than the analysts had forecast prior to the result. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Ranpak Holdings' three analysts are now forecasting revenues of US$457.4m in 2027. This would be a solid 8.9% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 80% to US$0.08. Before this earnings announcement, the analysts had been modelling revenues of US$473.1m and losses of US$0.07 per share in 2027. While next year's revenue estimates dropped there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
See our latest analysis for Ranpak Holdings
The average price target fell 21% to US$5.58, implicitly signalling that lower earnings per share are a leading indicator for Ranpak Holdings' valuation. 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. There are some variant perceptions on Ranpak Holdings, with the most bullish analyst valuing it at US$7.25 and the most bearish at US$3.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Ranpak Holdings' growth to accelerate, with the forecast 7.0% annualised growth to the end of 2027 ranking favourably alongside historical growth of 2.9% per annum 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 3.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ranpak Holdings to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded Ranpak Holdings' 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 Ranpak Holdings' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Ranpak Holdings. 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 Ranpak Holdings going out to 2028, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Ranpak Holdings .
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