It's been a mediocre week for Cable One, Inc. (NYSE:CABO) shareholders, with the stock dropping 10% to US$1,573 in the week since its latest yearly results. It was a credible result overall, with revenues of US$1.2b and statutory earnings per share of US$31.12 both in line with analyst estimates, showing that Cable One is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Following the latest results, Cable One's five analysts are now forecasting revenues of US$1.31b in 2020. This would be a decent 12% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to surge 25% to US$39.33. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.27b and earnings per share (EPS) of US$41.44 in 2020. Overall it looks as though analysts were a bit mixed on the latest results. Although there was a a decent to revenue, the consensus also made a small dip in to its earnings per share forecasts.
There's been no major changes to an analyst price target of US$1,587, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cable One, with the most bullish analyst valuing it at US$1,968 and the most bearish at US$1,240 per share. 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.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Analysts are definitely expecting Cable One's growth to accelerate, with the forecast 12% growth ranking favourably alongside historical growth of 8.6% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 4.0% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Cable One is expected to grow much faster than its market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cable One. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. The consensus price target held steady at US$1,587, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Cable One going out to 2022, and you can see them free on our platform here..
You can also view our analysis of Cable One's balance sheet, and whether we think Cable One is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.