As you might know, Cubic Corporation (NYSE:CUB) just kicked off its latest full-year results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 2.1% to hit US$1.5b. Earnings per share (EPS) came in at US$1.67, some 5.0% above what analysts had expected. 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 gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.
After the latest results, the six analysts covering Cubic are now predicting revenues of US$1.60b in 2020. If met, this would reflect a credible 7.1% improvement in sales compared to the last 12 months. Earnings per share are expected to ascend 17% to US$1.95. In the lead-up to this report, analysts had been modelling revenues of US$1.59b and earnings per share (EPS) of US$2.37 in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the real cut to new EPS forecasts.
The consensus price target held steady at US$75.33, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Cubic at US$82.00 per share, while the most bearish prices it at US$67.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Further, we can compare these estimates to past performance, and see how Cubic forecasts compare to the wider market's forecast performance. For example, we noticed that Cubic's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 7.1%, well above its historical decline of 2.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue grow 5.4% per year. So it looks like Cubic is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest highlight of the new consensus is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cubic. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Cubic going out to 2021, and you can see them free on our platform here..
You can also see whether Cubic is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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