As you might know, PriceSmart, Inc. (NASDAQ:PSMT) just kicked off its latest third-quarter results with some very strong numbers. PriceSmart delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$800m, some 15% above indicated. Statutory EPS were US$0.41, an impressive 86% ahead of forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for PriceSmart from solitary analyst is for revenues of US$3.44b in 2021 which, if met, would be a reasonable 3.5% increase on its sales over the past 12 months. Statutory earnings per share are predicted to grow 11% to US$2.87. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$3.37b and earnings per share (EPS) of US$2.61 in 2021. The analyst seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 20% to US$78.00, suggesting that higher earnings estimates flow through to the stock's valuation as well.
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 can infer from the latest estimates that forecasts expect a continuation of PriceSmart'shistorical trends, as next year's 3.5% revenue growth is roughly in line with 3.6% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.6% next year. So although PriceSmart is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around PriceSmart's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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