Last week, you might have seen that Columbia Sportswear Company (NASDAQ:COLM) released its annual result to the market. The early response was not positive, with shares down 7.7% to US$81.29 in the past week. Columbia Sportswear reported in line with analyst predictions, delivering revenues of US$3.0b and statutory earnings per share of US$4.83, suggesting the business is executing well and in line with its plan. 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 analysts have changed their mind on Columbia Sportswear after the latest results.
Taking into account the latest results, the latest consensus from Columbia Sportswear’s nine analysts is for revenues of US$3.20b in 2020, which would reflect a modest 5.0% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to shrink 2.3% to US$4.76 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$3.21b and earnings per share (EPS) of US$4.81 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$102. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Columbia Sportswear at US$115 per share, while the most bearish prices it at US$78.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Columbia Sportswear’s performance in recent years. It’s pretty clear that analysts expect Columbia Sportswear’s revenue growth will slow down substantially, with revenues next year expected to grow 5.0%, compared to a historical growth rate of 6.7% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 7.2% per year. So it’s pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Columbia Sportswear.
The Bottom Line
The most obvious conclusion from these results is that there’s been no major change in the business’ prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – although our data does suggest that Columbia Sportswear’s revenues are expected to perform worse than the wider market. The consensus price target held steady at US$102, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for Columbia Sportswear going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Columbia Sportswear Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.