The analysts might have been a bit too bullish on Methode Electronics, Inc. (NYSE:MEI), given that the company fell short of expectations when it released its first-quarter results last week. Revenues missed expectations somewhat, coming in at US$259m, but statutory earnings fell catastrophically short, with a loss of US$0.52 some 68% larger than what the analysts had predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, Methode Electronics' four analysts currently expect revenues in 2025 to be US$1.09b, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 83% to US$0.70. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.10b and losses of US$0.55 per share in 2025. While this year's revenue estimates held steady, there was also a regrettable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 9.5% to US$12.67, with the analysts signalling that growing losses would be a definite concern. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Methode Electronics, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$11.00 per share. 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. We would highlight that Methode Electronics' revenue growth is expected to slow, with the forecast 1.1% annualised growth rate until the end of 2025 being well below the historical 2.7% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Methode Electronics.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Methode Electronics. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Methode Electronics analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Methode Electronics has 2 warning signs we think you should be aware of.

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