The investors in Consensus Cloud Solutions, Inc.‘s (NASDAQ:CCSI) will be rubbing their hands together with glee today, after the share price leapt 57% to US$19.11 in the week following its first-quarter results. It looks like a credible result overall – although revenues of US$88m were what the analysts expected, Consensus Cloud Solutions surprised by delivering a (statutory) profit of US$1.37 per share, an impressive 36% above what was forecast. 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Consensus Cloud Solutions after the latest results.
See our latest analysis for Consensus Cloud Solutions
Taking into account the latest results, the current consensus, from the five analysts covering Consensus Cloud Solutions, is for revenues of US$343.7m in 2024. This implies a small 4.3% reduction in Consensus Cloud Solutions’ revenue over the past 12 months. Statutory earnings per share are forecast to reduce 6.0% to US$4.31 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$343.7m and earnings per share (EPS) of US$4.03 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target fell 7.6% to US$22.00, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Consensus Cloud Solutions analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$17.00. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.7% by the end of 2024. This indicates a significant reduction from annual growth of 19% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. It’s pretty clear that Consensus Cloud Solutions’ revenues are expected to perform substantially worse 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 Consensus Cloud Solutions following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Consensus Cloud Solutions’ revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Consensus Cloud Solutions going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 4 warning signs for Consensus Cloud Solutions (3 don’t sit too well with us!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
