It's been a mediocre week for CURO Group Holdings Corp. (NYSE:CURO) shareholders, with the stock dropping 11% to US$7.49 in the week since its latest third-quarter results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$182m, statutory earnings beat expectations by a notable 389%, coming in at US$0.31 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the consensus from CURO Group Holdings' five analysts is for revenues of US$980.4m in 2021, which would reflect a chunky 8.1% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to crater 29% to US$1.72 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.02b and earnings per share (EPS) of US$1.81 in 2021. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The analysts made no major changes to their price target of US$14.25, suggesting the downgrades are not expected to have a long-term impact on CURO Group Holdings' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values CURO Group Holdings at US$18.00 per share, while the most bearish prices it at US$12.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CURO Group Holdings' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 8.1%, a significant reduction from annual growth of 7.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.7% next year. It's pretty clear that CURO Group Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will 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 CURO Group Holdings 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 CURO Group Holdings (including 1 which is significant) .
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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