Shareholders might have noticed that Jack in the Box Inc. (NASDAQ:JACK) filed its third-quarter result this time last week. The early response was not positive, with shares down 3.1% to US$17.03 in the past week. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$258m, statutory earnings beat expectations by a notable 17%, coming in at US$1.03 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

After the latest results, the consensus from Jack in the Box's 17 analysts is for revenues of US$1.13b in 2027, which would reflect a definite 17% decline in revenue compared to the last year of performance. Jack in the Box is also expected to turn profitable, with statutory earnings of US$3.21 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.13b and earnings per share (EPS) of US$3.61 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 substantial drop in EPS estimates.

Despite cutting their earnings forecasts,the analysts have lifted their price target 22% to US$20.00, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Jack in the Box, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$12.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jack in the Box's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2027. This indicates a significant reduction from annual growth of 2.4% 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 9.5% annually for the foreseeable future. It's pretty clear that Jack in the Box's 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 plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Jack in the Box. 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 Jack in the Box going out to 2028, 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.