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Cambium Networks Corporation (NASDAQ:CMBM) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of US$278m, some 2.1% above estimates, and statutory earnings per share (EPS) coming in at US$0.70, 32% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Cambium Networks' eight analysts is for revenues of US$333.7m in 2021, which would reflect a meaningful 20% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 59% to US$1.15. Before this earnings report, the analysts had been forecasting revenues of US$311.7m and earnings per share (EPS) of US$0.82 in 2021. So it seems there's been a definite increase in optimism about Cambium Networks' future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.
It will come as no surprise to learn that the analysts have increased their price target for Cambium Networks 52% to US$50.07on the back of these upgrades. 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. The most optimistic Cambium Networks analyst has a price target of US$56.00 per share, while the most pessimistic values it at US$47.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Cambium Networks' rate of growth is expected to accelerate meaningfully, with the forecast 20% revenue growth noticeably faster than its historical growth of 6.5%p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.4% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cambium Networks to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Cambium Networks' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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. At Simply Wall St, we have a full range of analyst estimates for Cambium Networks going out to 2023, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Cambium Networks that you should be aware of.
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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