CPI Card Group Inc. Just Missed Earnings - But Analysts Have Updated Their Models
CPI Card Group Inc. (NASDAQ:PMTS) just released its latest third-quarter report and things are not looking great. Results showed a clear earnings miss, with US$106m revenue coming in 7.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.33 missed the mark badly, arriving some 33% below what was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for CPI Card Group
Taking into account the latest results, the current consensus, from the two analysts covering CPI Card Group, is for revenues of US$457.1m in 2024. This implies a measurable 2.4% reduction in CPI Card Group's revenue over the past 12 months. Statutory earnings per share are expected to descend 17% to US$2.44 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$511.7m and earnings per share (EPS) of US$3.66 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a large cut to earnings per share numbers as well.
The consensus price target fell 38% to US$25.00, with the weaker earnings outlook clearly leading valuation estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 1.9% annualised decline to the end of 2024. That is a notable change from historical growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CPI Card Group is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CPI Card Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for CPI Card Group going out as far as 2024, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for CPI Card Group (2 are potentially serious!) that you need to take into consideration.
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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.
