CBIZ, Inc. (NYSE:CBZ) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. CBIZ reported US$948m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.26 beat expectations, being 2.2% higher than what analysts expected. Following the result, 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on CBIZ after the latest results.
Taking into account the latest results, the latest consensus from CBIZ's four analysts is for revenues of US$1.00b in 2020, which would reflect a modest 5.4% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to increase 8.1% to US$1.42. Before this earnings report, analysts had been forecasting revenues of US$1.00b and earnings per share (EPS) of US$1.36 in 2020. So the consensus seems to have become somewhat more optimistic on CBIZ's earnings potential following these results.
There's been no major changes to the consensus price target of US$28.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. Currently, the most bullish analyst values CBIZ at US$35.00 per share, while the most bearish prices it at US$23.00. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. We can infer from the latest estimates that analysts are expecting a continuation of CBIZ's historical trends, as next year's forecast 5.4% revenue growth is roughly in line with 6.1% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 5.8% next year. So although CBIZ is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards CBIZ following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple CBIZ analysts - going out to 2021, and you can see them free on our platform here.
We also provide an overview of the CBIZ Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.
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