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It's been a sad week for Sykes Enterprises, Incorporated (NASDAQ:SYKE), who've watched their investment drop 13% to US$31.20 in the week since the company reported its full-year result. Results were roughly in line with estimates, with revenues of US$1.6b and statutory earnings per share of US$1.53. 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 current consensus from Sykes Enterprises's three analysts is for revenues of US$1.70b in 2020, which would reflect an okay 5.4% increase on its sales over the past 12 months. Statutory earnings per share are expected to surge 35% to US$2.08. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.67b and earnings per share (EPS) of US$1.98 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$36.33, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Sykes Enterprises, with the most bullish analyst valuing it at US$38.00 and the most bearish at US$35.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
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. Next year brings more of the same, according to analysts, with revenue forecast to grow 5.4%, in line with its 5.5% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So it's pretty clear that Sykes Enterprises is expected to grow slower than similar companies in the same market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sykes Enterprises 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$36.33, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Sykes Enterprises analysts - going out to 2021, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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