As you might know, Century Casinos, Inc. (NASDAQ:CNTY) last week released its latest quarterly, and things did not turn out so great for shareholders. Century Casinos missed analyst estimates, with revenues of US$136m and a statutory loss per share (eps) of US$0.45 falling 2.8% and 4.6% below expectations, respectively. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Century Casinos after the latest results.
Taking into account the latest results, the consensus forecast from Century Casinos' three analysts is for revenues of US$605.8m in 2024. This reflects a modest 4.9% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 21% to US$1.04. Before this latest report, the consensus had been expecting revenues of US$617.3m and US$0.91 per share in losses. While this year's revenue estimates held steady, there was also a considerable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 10.0% to US$4.50per share, with the analysts clearly concerned by ballooning losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Century Casinos at US$5.00 per share, while the most bearish prices it at US$4.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Century Casinos is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Century Casinos' past performance and to peers in the same industry. We would highlight that Century Casinos' revenue growth is expected to slow, with the forecast 6.5% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Century Casinos is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Century Casinos' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Century Casinos going out to 2026, and you can see them free on our platform here.
Even so, be aware that Century Casinos is showing 3 warning signs in our investment analysis , you should know about...
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