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Earnings Miss: PriceSmart, Inc. Missed EPS By 7.2% And Analysts Are Revising Their Forecasts

Simply Wall St

Last week, you might have seen that PriceSmart, Inc. (NASDAQ:PSMT) released its first-quarter result to the market. The early response was not positive, with shares down 5.7% to US$64.18 in the past week. Revenues of US$812m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.64, missing estimates by 7.2%. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.

Check out our latest analysis for PriceSmart

NasdaqGS:PSMT Past and Future Earnings, January 12th 2020

Taking into account the latest results, the most recent consensus for PriceSmart from one analyst is for revenues of US$3.39b in 2020, which is a modest 4.0% increase on its sales over the past 12 months. Statutory earnings per share are expected to accumulate 9.8% to US$2.82. Yet prior to the latest earnings, analysts had been forecasting revenues of US$3.42b and earnings per share (EPS) of US$2.83 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With no major changes to earnings forecasts, the consensus price target fell 13% to US$74.67, suggesting that analysts might have previously been hoping for an earnings upgrade.

Further, we can compare these estimates to past performance, and see how PriceSmart forecasts compare to the wider market's forecast performance. We can infer from the latest estimates that analysts are expecting a continuation of PriceSmart's historical trends, as next year's forecast 4.0% revenue growth is roughly in line with 4.1% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 4.1% next year. It's clear that while PriceSmart's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the market itself.

The Bottom Line

The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for PriceSmart going out as far as 2021, and you can see them free on our platform here.

We also provide an overview of the PriceSmart Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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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