CoreSite Realty Corporation (NYSE:COR) shares fell 4.1% to US$113 in the week since its latest annual results. It looks like the results were a bit of a negative overall. While revenues of US$573m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.0% to hit US$2.05 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for CoreSite Realty from 15 analysts is for revenues of US$610.4m in 2020, which is a reasonable 6.6% increase on its sales over the past 12 months. Statutory earnings per share are forecast to drop 15% to US$1.76 in the same period. Before this earnings report, analysts had been forecasting revenues of US$623.7m and earnings per share (EPS) of US$2.15 in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$116 price target, showing that analysts don't think the changes have a meaningful impact on the stock's intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CoreSite Realty, with the most bullish analyst valuing it at US$141 and the most bearish at US$100.00 per share. 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.
In addition, we can look to CoreSite Realty's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect CoreSite Realty's revenue growth will slow down substantially, with revenues next year expected to grow 6.6%, compared to a historical growth rate of 15% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.1% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkCoreSite Realty will grow faster than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CoreSite Realty. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that CoreSite Realty's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$116, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for CoreSite Realty going out to 2024, and you can see them free on our platform here..
You can also view our analysis of CoreSite Realty's balance sheet, and whether we think CoreSite Realty is carrying too much debt, for free on our platform here.
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