The investors in Vestis Corporation's (NYSE:VSTS) will be rubbing their hands together with glee today, after the share price leapt 20% to US$8.23 in the week following its first-quarter results. Revenues were in line with expectations, at US$663m, while statutory losses ballooned to US$0.05 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.

Taking into account the latest results, the six analysts covering Vestis provided consensus estimates of US$2.65b revenue in 2026, which would reflect a small 2.4% decline over the past 12 months. Earnings are expected to improve, with Vestis forecast to report a statutory profit of US$0.095 per share. Before this earnings report, the analysts had been forecasting revenues of US$2.64b and break-even in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the earnings per share expectations following these results.

The consensus price target rose 29% to US$7.92, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Vestis, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$5.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that Vestis' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 3.3% to the end of 2026. This tops off a historical decline of 0.8% a year over the past three years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So while a broad number of companies are forecast to grow, unfortunately Vestis is expected to see its revenue affected worse than other companies in the industry.

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 Vestis 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. 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 Vestis. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Vestis analysts - going out to 2028, 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.