Shareholders of Camping World Holdings, Inc. (NYSE:CWH) will be pleased this week, given that the stock price is up 14% to US$12.10 following its latest third-quarter results. Revenues of US$1.4b beat expectations by 5.2%. Unfortunately earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.82 compared to previous analyst expectations of a profit. 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 forecasts to see what analysts are expecting for next year.
Following last week's earnings report, Camping World Holdings's nine analysts are forecasting 2020 revenues to be US$4.95b, approximately in line with the last 12 months. Earnings are expected to improve, with Camping World Holdings forecast to report a profit of US$0.72 per share. In the lead-up to this report, analysts had been modelling revenues of US$4.97b and earnings per share (EPS) of US$1.01 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
The consensus price target held steady at US$10.50, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Camping World Holdings at US$14.00 per share, while the most bearish prices it at US$6.00. 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.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that Camping World Holdings's revenue growth is expected to slow, with forecast 0.9% increase next year well below the historical 13%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Camping World Holdings to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$10.50, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Camping World Holdings analysts - going out to 2021, and you can see them free on our platform here.
You can also see whether Camping World Holdings is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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