Yahoo Finance Compass Minerals International, Inc. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts
Last week saw the newest quarterly earnings release from Compass Minerals International, Inc. (NYSE:CMP), an important milestone in the company's journey to build a stronger business. Revenues fell 4.2% short of expectations, at US$342m. Earnings correspondingly dipped, with Compass Minerals International reporting a statutory loss of US$1.83 per share, whereas the analysts had previously modelled a profit in this period. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Compass Minerals International
Taking into account the latest results, Compass Minerals International's eight analysts currently expect revenues in 2024 to be US$1.15b, approximately in line with the last 12 months. Per-share losses are predicted to creep up to US$2.19. Before this latest report, the consensus had been expecting revenues of US$1.18b and US$0.58 per share in losses. While this year's revenue estimates dropped there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target fell 6.1% to US$22.00, implicitly signalling that lower earnings per share are a leading indicator for Compass Minerals International'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 Compass Minerals International analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$15.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 3.6% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.0% per year. So it's pretty clear that, although revenues are improving, Compass Minerals International is still expected to grow slower than the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Compass Minerals International's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Compass Minerals International analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Compass Minerals International .
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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.
