As you might know, BEST Inc. (NYSE:BEST) last week released its latest quarterly, and things did not turn out so great for shareholders. Revenues missed expectations somewhat, coming in at CN¥5.5b, but statutory earnings fell catastrophically short, with a loss of CN¥1.91 some 27% larger than what the analysts had predicted. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from BEST's nine analysts is for revenues of CN¥38.8b in 2020, which would reflect a notable 15% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 52% to CN¥0.89. Before this latest report, the consensus had been expecting revenues of CN¥39.7b and CN¥0.18 per share in losses. While this year's revenue estimates dropped there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target was broadly unchanged at CN¥41.73, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values BEST at CN¥7.45 per share, while the most bearish prices it at CN¥3.92. This is a very narrow spread of estimates, implying either that BEST is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BEST's past performance and to peers in the same industry. We would highlight that BEST's revenue growth is expected to slow, with forecast 15% increase next year well below the historical 33%p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.9% next year. So it's pretty clear that, while BEST's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that BEST's revenues are expected to grow faster 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 estimates - from multiple BEST analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of BEST's balance sheet, and whether we think BEST is carrying too much debt, for free on our platform here.
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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. Thank you for reading.