Here’s Why The Bar Is Set Low For Whole Foods
Estimize | Jul 30, 2014 10:04AM ET
Whole Foods Market Inc. (NASDAQ:WFM) is set to report FQ3 2014 earnings after the market closes on Wednesday, July 30th. Whole Foods is a upscale supermarket chain that sells natural and organic products. In the past 2 quarters WFM has missed its revenue target worrying investors that it may be losing its edge to lower priced competitors in the expanding natural and organic foods market. Shares of Whole Foods are trading at their lowest level since the start of 2012 and sentiment around this quarter’s earnings expectations are low. Here’s what investors are looking for from Whole Foods.
This quarter 37 contributing analysts on Estimize.com have come to a consensus earnings expectation of 38c EPS and $3.373B in revenue compared to a consensus of 39c EPS and $3.395M from Wall Street. This quarter the Estimize community is expecting Whole Foods to miss the Wall Street consensus on both the top and bottom line by a small margin.
Whole Foods is coming off two consecutive quarters in which earnings came in well below the Wall Street consensus. In early May Whole Foods missed Estimize consensus by 3 cents per share and the value of company stock plummeted 18% overnight.
Revenue growth at Whole Foods has been moving along, but not at a blistering pace. In 5 of the past 6 quarters the company has posted revenue growth between 10% and 14%. Sales were relatively stagnant in the other quarter. The Estimize community is setting the bar low for Wednesday afternoon, only expecting about 10% growth. But one of the top analysts on the platform disagrees.
Estimize.com ranks and allows the sorting of analysts by accuracy. More points are awarded for precise estimates on companies that have difficult earnings to forecast. So far this earnings season among all analysts with at least 25 estimates scored, longtime standout analyst Nils1975 has achieved the highest points per estimate with an average of 19.57.
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The analyst with the highest points per estimate average who has also submitted an estimate on Whole Foods this quarter is idearain. This quarter idearain is taking the opposite view of the Estimize community and expecting Whole Foods to breeze past the consensus of not just Estimize, but Wall Street as well.
Estimize is completely open and free for anyone to contribute, and the base of contributing analysts on the platform includes hedge fund analysts, asset managers, independent research shops, non professional investors, and students.
The Estimize consensus was more accurate than the Wall Street consensus 65% of the time last quarter on the coverage of nearly 1000 stocks. A combination of algorithms ensures that the data is not only clean and free from people attempting to game the system, but also weighs past performance and many other factors to gauge future accuracy.
Contributing analysts on the Estimize.com platform are forecasting that on Wednesday Whole Foods will earn a penny per share less than Wall Street is predicting and miss the Street’s revenue consensus by $23 million (~1%). The Estimize community is expecting Whole Foods to post year over year revenue growth of 10% while earnings remain unchanged compared to the same period of last year. The buy side as represented by the Estimize community is setting the bar low for Whole Foods this quarter. An earnings report that is in-line with the Wall Street consensus might be enough to finally get shares of Whole Foods moving in the right direction again.
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