AU$3.11: That's What Analysts Think Carbon Revolution Limited (ASX:CBR) Is Worth After Its Latest Results

By
Simply Wall St
Published
February 26, 2021
ASX:CBR

There's been a notable change in appetite for Carbon Revolution Limited (ASX:CBR) shares in the week since its half-year report, with the stock down 11% to AU$2.24. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Carbon Revolution

earnings-and-revenue-growth
ASX:CBR Earnings and Revenue Growth February 25th 2021

Taking into account the latest results, the consensus forecast from Carbon Revolution's dual analysts is for revenues of AU$45.8m in 2021, which would reflect a sizeable 27% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 72% to AU$0.06. Before this earnings announcement, the analysts had been modelling revenues of AU$47.0m and losses of AU$0.04 per share in 2021. So it's pretty clear the analysts have mixed opinions on Carbon Revolution after this update; revenues were downgraded and per-share losses expected to increase.

The average price target fell 5.0% to AU$3.11, implicitly signalling that lower earnings per share are a leading indicator for Carbon Revolution's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Carbon Revolution'shistorical trends, as next year's 27% revenue growth is roughly in line with 23% annual revenue growth over the past year. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% next year. So it's pretty clear that Carbon Revolution is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Carbon Revolution. They also downgraded their revenue estimates, although industry data suggests that Carbon Revolution's revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 analyst estimates for Carbon Revolution going out as far as 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Carbon Revolution that we have uncovered.

Promoted
When trading Carbon Revolution or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.


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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.