Analysts Have Lowered Expectations For Synchronoss Technologies, Inc. (NASDAQ:SNCR) After Its Latest Results
The third-quarter results for Synchronoss Technologies, Inc. (NASDAQ:SNCR) were released last week, making it a good time to revisit its performance. Results look to have been somewhat negative - revenue fell 2.4% short of analyst estimates at US$69m, although statutory losses were somewhat better. The per-share loss was US$0.36, 29% smaller than the analysts were expecting prior to the result. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Synchronoss Technologies
Taking into account the latest results, the four analysts covering Synchronoss Technologies provided consensus estimates of US$282.4m revenue in 2021, which would reflect a chunky 9.7% decline on its sales over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$1.49. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$310.4m and losses of US$1.35 per share in 2021. While next year's revenue estimates dropped there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target fell 9.4% to US$7.81, implicitly signalling that lower earnings per share are a leading indicator for Synchronoss Technologies' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Synchronoss Technologies analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$6.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Synchronoss Technologies shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One more thing stood out to us about these estimates, and it's the idea that Synchronoss Technologies'decline is expected to accelerate, with revenues forecast to fall 9.7% next year, topping off a historical decline of 6.3% a year 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 13% per year. So while a broad number of companies are forecast to decline, unfortunately Synchronoss Technologies is expected to see its sales affected worse than other companies in the industry.
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 negative side, they also downgraded their revenue estimates, and forecasts imply revenues 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.
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 Synchronoss Technologies analysts - going out to 2022, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Synchronoss Technologies (1 is concerning!) that we have uncovered.
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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