Yahoo Finance Simpson Manufacturing Co., Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
As you might know, Simpson Manufacturing Co., Inc. (NYSE:SSD) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$284m, some 3.2% above estimates, and statutory earnings per share (EPS) coming in at US$0.83, 39% ahead of expectations. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Simpson Manufacturing
Taking into account the latest results, the current consensus, from the four analysts covering Simpson Manufacturing, is for revenues of US$1.01b in 2020, which would reflect a chunky 13% reduction in Simpson Manufacturing's sales over the past 12 months. Statutory earnings per share are forecast to plummet 37% to US$2.11 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.03b and earnings per share (EPS) of US$1.78 in 2020. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.
There's been no major changes to the consensus price target of US$65.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic Simpson Manufacturing analyst has a price target of US$79.00 per share, while the most pessimistic values it at US$56.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with the forecast 13% revenue decline a notable change from historical growth of 9.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Simpson Manufacturing is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Simpson Manufacturing's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although 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.
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 Simpson Manufacturing going out to 2021, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Simpson Manufacturing (1 is potentially serious!) that we have uncovered.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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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