It's been a sad week for Plantronics, Inc. (NYSE:PLT), who've watched their investment drop 11% to US$26.88 in the week since the company reported its third-quarter result. Results look to have been somewhat negative - revenue fell 3.7% short of analyst estimates at US$384m, although statutory losses were somewhat better. The per-share loss was US$1.97, 163% smaller than analysts were expecting prior to the result. 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
After the latest results, the consensus from Plantronics's six analysts is for revenues of US$1.67b in 2021, which would reflect a noticeable 5.1% decline in sales compared to the last year of performance. Statutory losses are forecast to balloon 40% to US$2.62 per share. Before this latest report, the consensus had been expecting revenues of US$1.83b and US$1.42 per share in losses. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The consensus price target fell 41% to US$23.67, with analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Plantronics at US$44.00 per share, while the most bearish prices it at US$21.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 sales are expected to reverse, with the forecast 5.1% revenue decline a notable change from historical growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 3.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Plantronics to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts reduced their loss per share estimates for next year, perhaps highlighting increased optimism around Plantronics's prospects. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. 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 estimates - from multiple Plantronics analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Plantronics's balance sheet, and whether we think Plantronics is carrying too much debt, for free on our platform here.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.