Clover Corporation Limited Just Missed Earnings - But Analysts Have Updated Their Models

The full-year results for Clover Corporation Limited (ASX:CLV) were released last week, making it a good time to revisit its performance. Revenues were in line with forecasts, at AU$88m, although statutory earnings per share came in 11% below what the analysts expected, at AU$0.074 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Clover after the latest results.

Check out our latest analysis for Clover

Taking into account the latest results, the current consensus from Clover's twin analysts is for revenues of AU$94.3m in 2021, which would reflect a satisfactory 6.8% increase on its sales over the past 12 months. Per-share earnings are expected to surge 25% to AU$0.078. In the lead-up to this report, the analysts had been modelling revenues of AU$100.0m and earnings per share (EPS) of AU$0.083 in 2021. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the AU$2.69 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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 Clover's revenue growth is expected to slow, with forecast 6.8% increase next year well below the historical 20%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.9% next year. Factoring in the forecast slowdown in growth, it looks like Clover is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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 in mind, we wouldn't be too quick to come to a conclusion on Clover. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Clover going out as far as 2023, and you can see them free on our platform here.

You can also see whether Clover is carrying too much debt, and whether its balance sheet is healthy, 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.
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