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Last week, you might have seen that CyrusOne Inc. (NASDAQ:CONE) released its first-quarter result to the market. The early response was not positive, with shares down 3.5% to US$70.18 in the past week. Although revenues of US$246m were in line with analyst expectations, CyrusOne surprised on the earnings front, with an unexpected (statutory) profit of US$0.13 per share a nice improvement on the losses that the analystsforecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CyrusOne after the latest results.
Taking into account the latest results, the current consensus from CyrusOne's 14 analysts is for revenues of US$1.03b in 2020, which would reflect a credible 2.8% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 90% to US$0.03. Before this latest report, the consensus had been expecting revenues of US$1.04b and US$0.016 per share in losses. So it's pretty clear the analysts have mixed opinions on CyrusOne even after this update; although they reconfirmed their revenue numbers, it came at the cost of a per-share losses.
As a result, there was no major change to the consensus price target of US$71.47, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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 CyrusOne, with the most bullish analyst valuing it at US$82.00 and the most bearish at US$58.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's pretty clear that there is an expectation that CyrusOne's revenue growth will slow down substantially, with revenues next year expected to grow 2.8%, compared to a historical growth rate of 22% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.3% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CyrusOne.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at CyrusOne. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$71.47, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple CyrusOne analysts - going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for CyrusOne that you need to take into consideration.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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