It's been a sad week for CES Energy Solutions Corp. (TSE:CEU), who've watched their investment drop 12% to CA$0.95 in the week since the company reported its first-quarter result. The results don't look great, especially considering that the analysts had been forecasting a profit and CES Energy Solutions delivered a statutory loss of CA$0.86 per share. Revenues of CA$349m did beat expectations by 7.7% though. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus, from the 13 analysts covering CES Energy Solutions, is for revenues of CA$888.4m in 2020, which would reflect a disturbing 31% reduction in CES Energy Solutions' sales over the past 12 months. Per-share losses are expected to explode, reaching CA$1.05 per share. Before this latest report, the consensus had been expecting revenues of CA$945.0m and CA$0.086 per share in losses. While this year's revenue estimates dropped there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
There was no major change to the consensus price target of CA$1.76, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CES Energy Solutions, with the most bullish analyst valuing it at CA$4.00 and the most bearish at CA$1.25 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 31%, a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 5.8% annually for the foreseeable future. The forecasts do look bearish for CES Energy Solutions, since they're expecting it to shrink faster than the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately they also downgraded their revenue estimates, and our analysts estimates suggest that CES Energy Solutions is still expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for CES Energy Solutions going out to 2022, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with CES Energy Solutions .
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