Market forces rained on the parade of CoreCard Corporation (NYSE:CCRD) shareholders today, when the covering analyst downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.
Following the latest downgrade, the sole analyst covering CoreCard provided consensus estimates of US$55m revenue in 2024, which would reflect a not inconsiderable 8.2% decline on its sales over the past 12 months. Statutory earnings per share are supposed to plunge 20% to US$0.37 in the same period. Prior to this update, the analyst had been forecasting revenues of US$69m and earnings per share (EPS) of US$1.18 in 2024. Indeed, we can see that the analyst is a lot more bearish about CoreCard's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for CoreCard
NYSE:CCRD Earnings and Revenue Growth November 6th 2023
The consensus price target fell 30% to US$19.00, with the weaker earnings outlook clearly leading analyst valuation estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.6% by the end of 2024. This indicates a significant reduction from annual growth of 23% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CoreCard is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of CoreCard.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with CoreCard's business, like its declining profit margins. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.