Results: KinderCare Learning Companies, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

KinderCare Learning Companies, Inc. (NYSE:KLC) shareholders are probably feeling a little disappointed, since its shares fell 8.3% to US$12.25 in the week after its latest first-quarter results. It looks like a credible result overall - although revenues of US$668m were what the analysts expected, KinderCare Learning Companies surprised by delivering a (statutory) profit of US$0.18 per share, an impressive 42% above what was forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the latest results, KinderCare Learning Companies' seven analysts are now forecasting revenues of US$2.78b in 2025. This would be an okay 4.0% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with KinderCare Learning Companies forecast to report a statutory profit of US$0.82 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.81b and earnings per share (EPS) of US$0.80 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for KinderCare Learning Companies

The consensus price target fell 13% to US$20.88, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. 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. The most optimistic KinderCare Learning Companies analyst has a price target of US$26.00 per share, while the most pessimistic values it at US$15.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the KinderCare Learning Companies' past performance and to peers in the same industry. We would highlight that KinderCare Learning Companies' revenue growth is expected to slow, with the forecast 5.3% annualised growth rate until the end of 2025 being well below the historical 11% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% 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 KinderCare Learning Companies.

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 KinderCare Learning Companies 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. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for KinderCare Learning Companies going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for KinderCare Learning Companies you should know about.

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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.