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Industry Analysts Just Made A Meaningful Upgrade To Their CubeSmart (NYSE:CUBE) Revenue Forecasts

CubeSmart (NYSE:CUBE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for CubeSmart from its six analysts is for revenues of US$989m in 2022 which, if met, would be a huge 27% increase on its sales over the past 12 months. Per-share earnings are expected to increase 6.9% to US$1.04. Before this latest update, the analysts had been forecasting revenues of US$897m and earnings per share (EPS) of US$1.11 in 2022. While revenue forecasts have increased, the analysts if anything seem a little more pessimistic, given the minor downgrade to earnings per share estimates in this update.

See our latest analysis for CubeSmart

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earnings-and-revenue-growth

There's been no major changes to analyst price target of US$60.30, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' 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 CubeSmart analyst has a price target of US$66.00 per share, while the most pessimistic values it at US$57.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that CubeSmart's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 7.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CubeSmart to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at CubeSmart.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential warning sign with CubeSmart, including dilutive stock issuance over the past year. You can learn more, and discover the 1 other warning sign we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.