Earnings Miss: CI&T Inc. Missed EPS By 21% And Analysts Are Revising Their Forecasts
Shareholders of CI&T Inc. (NYSE:CINT) will be pleased this week, given that the stock price is up 12% to US$4.20 following its latest yearly results. Statutory earnings per share fell badly short of expectations, coming in at R$0.95, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at R$2.2b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CI&T after the latest results.
See our latest analysis for CI&T
Taking into account the latest results, CI&T's six analysts currently expect revenues in 2024 to be R$2.27b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 26% to R$1.26. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$2.24b and earnings per share (EPS) of R$1.34 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The consensus price target held steady at US$5.60, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values CI&T at US$7.97 per share, while the most bearish prices it at US$4.44. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 CI&T's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2024 being well below the historical 27% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CI&T.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CI&T. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that CI&T's revenue is expected to perform worse than the wider industry. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on CI&T. Long-term earnings power is much more important than next year's profits. We have forecasts for CI&T going out to 2026, and you can see them free on our platform here.
You can also see whether CI&T is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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.
