Last week, you might have seen that CoreSite Realty Corporation (NYSE:COR) released its third-quarter result to the market. The early response was not positive, with shares down 3.1% to US$119 in the past week. Revenues were US$154m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.50 were also better than expected, beating analyst predictions by 19%. 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.
After the latest results, the 14 analysts covering CoreSite Realty are now predicting revenues of US$652.7m in 2021. If met, this would reflect a notable 9.2% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$2.00, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$651.8m and earnings per share (EPS) of US$1.95 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$128, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values CoreSite Realty at US$146 per share, while the most bearish prices it at US$100.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that CoreSite Realty's revenue growth will slow down substantially, with revenues next year expected to grow 9.2%, compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.9% next year. Even after the forecast slowdown in growth, it seems obvious that CoreSite Realty is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards CoreSite Realty following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$128, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for CoreSite Realty going out to 2024, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for CoreSite Realty (1 can't be ignored) 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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