Investors in Blackline Safety Corp. (CVE:BLN) had a good week, as its shares rose 3.4% to close at CA$5.44 following the release of its second-quarter results. It was an okay report, and revenues came in at CA$8.5m, approximately in line with analyst estimates leading up to the results announcement. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Blackline Safety's three analysts is for revenues of CA$38.9m in 2020, which would reflect a satisfactory 7.4% increase on its sales over the past 12 months. Before this earnings result, the analysts had predicted CA$38.7m revenue in 2020, although there was no accompanying EPS estimate. From what we can see of these results, it looks like Blackline Safety is performing in line with expectations. the analysts we track have all updated their numbers following the results, and there were no major changes to their forecasts for next year.
We'd also point out that thatthe analysts have made no major changes to their price target of CA$9.25. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Blackline Safety analyst has a price target of CA$10.00 per share, while the most pessimistic values it at CA$8.75. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Blackline Safety is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Blackline Safety's revenue growth is expected to slow, with forecast 7.4% increase next year well below the historical 38%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Blackline Safety is also expected to grow slower than other industry participants.
The Bottom Line
The clear take away from these updates is that the analysts made no change to their revenue estimates for next year, with the business apparently performing in line with their models. 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 CA$9.25, with the latest estimates not enough to have an impact on their price targets.
At least one of Blackline Safety's three analysts has provided estimates out to 2021, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Blackline Safety that you should be aware of.
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. 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.
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