There's been a notable change in appetite for Skyline Champion Corporation (NYSE:SKY) shares in the week since its third-quarter report, with the stock down 18% to US$29.51. Revenues disappointed slightly, as sales of US$342m were 3.9% below what analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$0.30 coming in 11% above what analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Skyline Champion from five analysts is for revenues of US$1.50b in 2021, which is an okay 7.5% increase on its sales over the past 12 months. Statutory earnings per share are expected to leap 24% to US$1.35. Before this earnings report, analysts had been forecasting revenues of US$1.53b and earnings per share (EPS) of US$1.35 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Analysts reconfirmed their price target of US$37.83, showing that the business is executing well and in line with expectations. 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. There are some variant perceptions on Skyline Champion, with the most bullish analyst valuing it at US$45.00 and the most bearish at US$33.00 per share. This shows there is still quite 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.
Further, we can compare these estimates to past performance, and see how Skyline Champion forecasts compare to the wider market's forecast performance. We would highlight that Skyline Champion's revenue growth is expected to slow, with forecast 7.5% increase next year well below the historical 15%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 5.3% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkSkyline Champion will grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Skyline Champion's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$37.83, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Skyline Champion. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Skyline Champion analysts - going out to 2024, and you can see them free on our platform here.
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