It's been a pretty great week for Cimpress plc (NASDAQ:CMPR) shareholders, with its shares surging 14% to US$120 in the week since its latest second-quarter results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$820m, statutory earnings beat expectations by a notable 204%, coming in at US$6.81 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Cimpress's dual analysts are forecasting 2020 revenues to be US$2.81b, approximately in line with the last 12 months. Statutory earnings per share are expected to swell 18% to US$9.98. Yet prior to the latest earnings, analysts had been forecasting revenues of US$2.84b and earnings per share (EPS) of US$4.53 in 2020. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the very substantial lift in earnings per share expectations following these results.
There's been no major changes to the consensus price target of US$119, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.
Further, we can compare these estimates to past performance, and see how Cimpress forecasts compare to the wider market's forecast performance. We would highlight that Cimpress's revenue growth is expected to slow, with forecast 0.8% increase next year well below the historical 15%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 5.4% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Cimpress to grow slower than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Cimpress's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Cimpress's revenues are expected to perform worse than the wider market. The consensus price target held steady at US$119, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Cimpress. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
It might also be worth considering whether Cimpress's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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