Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) Analysts Are Cutting Their Estimates: Here's What You Need To Know
There's been a notable change in appetite for Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) shares in the week since its full-year report, with the stock down 12% to US$16.81. It looks like the results were a bit of a negative overall. While revenues of US$363m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.7% to hit US$3.94 per share. 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.
See our latest analysis for Consensus Cloud Solutions
Taking into account the latest results, the current consensus, from the six analysts covering Consensus Cloud Solutions, is for revenues of US$344.7m in 2024. This implies a measurable 4.9% reduction in Consensus Cloud Solutions' revenue over the past 12 months. Statutory per share are forecast to be US$4.03, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$365.3m and earnings per share (EPS) of US$4.24 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The analysts made no major changes to their price target of US$26.00, suggesting the downgrades are not expected to have a long-term impact on Consensus Cloud Solutions' valuation. 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. Currently, the most bullish analyst values Consensus Cloud Solutions at US$30.00 per share, while the most bearish prices it at US$20.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. Over the past five years, revenues have declined around 3.2% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 4.9% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 12% per year. So while a broad number of companies are forecast to grow, unfortunately Consensus Cloud Solutions is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Consensus Cloud Solutions. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$26.00, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Consensus Cloud Solutions. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Consensus Cloud Solutions analysts - going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Consensus Cloud Solutions (2 can't be ignored!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
