One of the biggest stories of last week was how DICK'S Sporting Goods, Inc. (NYSE:DKS) shares plunged 27% in the week since its latest second-quarter results, closing yesterday at US$132. Revenues of US$5.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$3.50, missing estimates by 5.1%. 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, the most recent consensus for DICK'S Sporting Goods from 22 analysts is for revenues of US$22.1b in 2027. If met, it would imply a credible 4.6% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 33% to US$12.47. In the lead-up to this report, the analysts had been modelling revenues of US$22.4b and earnings per share (EPS) of US$14.19 in 2027. 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 34% to US$166, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 DICK'S Sporting Goods analyst has a price target of US$241 per share, while the most pessimistic values it at US$99.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 9.4% growth on an annualised basis. That is in line with its 9.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.0% per year. So although DICK'S Sporting Goods is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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 DICK'S Sporting Goods. Happily, there were no major changes to revenue forecasts, with the business still 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 DICK'S Sporting Goods' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple DICK'S Sporting Goods analysts - going out to 2029, and you can see them free on our platform here.

Don't forget that there may still be risks.

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.