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Columbus McKinnon Corporation (NASDAQ:CMCO) just released its latest quarterly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$167m, some 6.3% above estimates, and statutory earnings per share (EPS) coming in at US$0.27, 96% 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Columbus McKinnon from seven analysts is for revenues of US$718.3m in 2022 which, if met, would be a solid 10% increase on its sales over the past 12 months. Statutory earnings per share are predicted to bounce 400% to US$1.84. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$706.7m and earnings per share (EPS) of US$1.67 in 2022. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 15% to US$50.14. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Columbus McKinnon analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$36.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Columbus McKinnon's rate of growth is expected to accelerate meaningfully, with the forecast 10% revenue growth noticeably faster than its historical growth of 5.2%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.5% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Columbus McKinnon 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 Columbus McKinnon's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Columbus McKinnon going out to 2025, and you can see them free on our platform here..
You still need to take note of risks, for example - Columbus McKinnon has 4 warning signs we think 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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