Culp, Inc. (NYSE:CULP) investors will be delighted, with the company turning in some strong numbers with its latest results. Culp beat earnings, with revenues hitting US$300m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 18%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Culp

After the latest results, the twin analysts covering Culp are now predicting revenues of US$325.7m in 2022. If met, this would reflect a solid 8.7% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 175% to US$0.72. In the lead-up to this report, the analysts had been modelling revenues of US$300.9m and earnings per share (EPS) of US$0.67 in 2022. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Culp 10% to US$22.00on the back of these upgrades.

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. One thing stands out from these estimates, which is that Culp is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.7% annualised growth until the end of 2022. If achieved, this would be a much better result than the 4.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.3% per year. So while Culp's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Culp's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Culp that you need to be mindful of.

This article by Simply Wall St is general in nature. 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.

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