The analysts might have been a bit too bullish on OneWater Marine Inc. (NASDAQ:ONEW), given that the company fell short of expectations when it released its third-quarter results last week. OneWater Marine missed earnings this time around, with US$531m revenue coming in 4.2% below what the analysts had modelled. Statutory earnings per share (EPS) of US$0.69 also fell short of expectations by 10%. 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.

Taking into account the latest results, OneWater Marine's five analysts currently expect revenues in 2027 to be US$1.84b, approximately in line with the last 12 months. OneWater Marine is also expected to turn profitable, with statutory earnings of US$1.19 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.88b and earnings per share (EPS) of US$1.10 in 2027. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

There's been no real change to the average price target of US$13.33, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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 OneWater Marine at US$14.00 per share, while the most bearish prices it at US$13.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that OneWater Marine's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 5.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that OneWater Marine is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards OneWater Marine following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on OneWater Marine. Long-term earnings power is much more important than next year's profits. We have forecasts for OneWater Marine going out to 2027, and you can see them free on our platform here.

Even so, be aware that OneWater Marine is showing 1 warning sign in our investment analysis , you should know about...

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.