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CalAmp Corp. (NASDAQ:CAMP) Yearly Results: Here's What Analysts Are Forecasting For This Year

Simply Wall St
·4 min read

Last week, you might have seen that CalAmp Corp. (NASDAQ:CAMP) released its yearly result to the market. The early response was not positive, with shares down 2.8% to US$6.53 in the past week. Revenues were in line with expectations, at US$366m, while statutory losses ballooned to US$2.36 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 CalAmp

NasdaqGS:CAMP Past and Future Earnings May 7th 2020
NasdaqGS:CAMP Past and Future Earnings May 7th 2020

Taking into account the latest results, the eight analysts covering CalAmp provided consensus estimates of US$334.1m revenue in 2021, which would reflect a considerable 8.7% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 58% to US$0.98. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$349.8m and losses of US$0.82 per share in 2021. So it's pretty clear the analysts have mixed opinions on CalAmp after this update; revenues were downgraded and per-share losses expected to increase.

The average price target was broadly unchanged at US$9.69, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. The most optimistic CalAmp analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$4.30. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 revenue decline of 8.7%, a significant reduction from annual growth of 7.1% 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 3.7% annually for the foreseeable future. It's pretty clear that CalAmp's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 CalAmp analysts - going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for CalAmp (1 is significant!) that you should be aware of.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.