Results: Crown Capital Partners Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, Crown Capital Partners Inc. (TSE:CRWN) just kicked off its latest first-quarter results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of CA$14m, some 5.6% above estimates, and statutory earnings per share (EPS) coming in at CA$0.16, 300% ahead of expectations. The analyst 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 estimate suggests is in store for next year.

Check out our latest analysis for Crown Capital Partners

After the latest results, the sole analyst covering Crown Capital Partners are now predicting revenues of CA$55.2m in 2021. If met, this would reflect an okay 5.2% improvement in sales compared to the last 12 months. Before this earnings report, the analyst had been forecasting revenues of CA$54.0m and earnings per share (EPS) of CA$0.17 in 2021. While they've upgraded their revenue numbers for next year, the consensus also expects losses to increase, perhaps due to the investments required to grow revenue. In any event, it's not clear that these new estimates are particularly bullish.

The consensus price target stayed unchanged at CA$6.30, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Crown Capital Partners' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 7.0% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 8.1% annually. Factoring in the forecast slowdown in growth, it's pretty clear that Crown Capital Partners is still expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst is expecting Crown Capital Partners to become unprofitable next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. The consensus price target held steady at CA$6.30, with the latest estimates not enough to have an impact on their price target.

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 Crown Capital Partners going out as far as 2022, and you can see them free on our platform here.

Even so, be aware that Crown Capital Partners is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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