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Clearfield, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

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Simply Wall St
·3 min read
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Clearfield, Inc. (NASDAQ:CLFD) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 9.5% to hit US$27m. Clearfield also reported a statutory profit of US$0.23, which was an impressive 77% above what the analysts had forecast. Following the result, the 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Clearfield

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Clearfield's dual analysts is for revenues of US$107.6m in 2021, which would reflect a credible 6.7% increase on its sales over the past 12 months. Statutory per share are forecast to be US$0.73, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$107.6m and earnings per share (EPS) of US$0.73 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 31% to US$33.50. It looks as though they previously had some doubts over whether the business would live up to their expectations.

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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 6.7%, in line with its 6.6% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.3% next year. So it's pretty clear that Clearfield is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Clearfield , and understanding these should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.