Yahoo Finance Stoneridge, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
There's been a major selloff in Stoneridge, Inc. (NYSE:SRI) shares in the week since it released its yearly report, with the stock down 21% to US$23.30. It looks like the results were a bit of a negative overall. While revenues of US$834m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.0% to hit US$2.13 per share. Following the result, 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Stoneridge
Taking into account the latest results, the four analysts covering Stoneridge provided consensus estimates of US$815.8m revenue in 2020, which would reflect a perceptible 2.2% decline on its sales over the past 12 months. Statutory earnings per share are expected to descend 19% to US$1.75 in the same period. Before this earnings result, analysts had predicted US$823.9m revenue in 2020, although there was no accompanying EPS estimate. So we can see that while the consensus made no real change to its revenue estimates, analysts began providing earnings per share estimates, suggesting a heightened focus on the business' earnings after the latest results.
The average analyst price target fell 12% to US$31.00, suggesting that analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Stoneridge at US$35.00 per share, while the most bearish prices it at US$33.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Stoneridge's past performance and to peers in the same market. These estimates imply that sales are expected to slow, with a forecast revenue decline of 2.2% a significant reduction from annual growth of 7.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 4.5% annually for the foreseeable future. It's pretty clear that Stoneridge's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most important thing to take away from these updates is that analysts are definitely optimistic on the business, given that they've begun forecasting positive per-share earnings for next year. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
Still, 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 Stoneridge going out to 2021, and you can see them free on our platform here..
It might also be worth considering whether Stoneridge's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
