It's shaping up to be a tough period for Virco Mfg. Corporation (NASDAQ:VIRC), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Unfortunately, Virco Mfg delivered a serious earnings miss. Revenues of US$83m were 15% below expectations, and statutory earnings per share of US$0.52 missed estimates by 40%. Following the result, the analyst has 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 thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the most recent consensus for Virco Mfg from one analyst is for revenues of US$287.5m in 2026. If met, it would imply a credible 2.5% increase on its revenue over the past 12 months. Statutory earnings per share are expected to sink 15% to US$1.31 in the same period. Before this earnings report, the analyst had been forecasting revenues of US$313.2m and earnings per share (EPS) of US$1.76 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 15% to US$17.00, with the weaker earnings outlook clearly leading valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Virco Mfg's revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2026 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Virco Mfg is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Virco Mfg. 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. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Virco Mfg's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Virco Mfg. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for 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.