It's been a sad week for Consensus Cloud Solutions, Inc. (NASDAQ:CCSI), who've watched their investment drop 12% to US$16.81 in the week since the company reported its annual result. Revenues of US$363m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$3.94, missing estimates by 2.7%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
NasdaqGS:CCSI Earnings and Revenue Growth February 25th 2024
Taking into account the latest results, the six analysts covering Consensus Cloud Solutions provided consensus estimates of US$344.7m revenue in 2024, which would reflect a small 4.9% decline over the past 12 months. Statutory per-share earnings are expected to be US$4.03, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$365.3m and earnings per share (EPS) of US$4.24 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$26.00 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Consensus Cloud Solutions at US$30.00 per share, while the most bearish prices it at US$20.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Consensus Cloud Solutions' past performance and to peers in the same industry. Over the past five years, revenues have declined around 3.2% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 4.9% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 12% per year. So while a broad number of companies are forecast to grow, unfortunately Consensus Cloud Solutions is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Consensus Cloud Solutions. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Consensus Cloud Solutions analysts - going out to 2025, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 3 warning signs for Consensus Cloud Solutions (2 are potentially serious!) that you need to be mindful of.
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