It's been a good week for Commercial Vehicle Group, Inc. (NASDAQ:CVGI) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.4% to US$7.13. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 14% higher than the analysts had forecast, at US$188m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Commercial Vehicle Group's two analysts is for revenues of US$829.6m in 2021, which would reflect a substantial 20% increase on its sales over the past 12 months. Commercial Vehicle Group is also expected to turn profitable, with statutory earnings of US$0.69 per share. Before this earnings report, the analysts had been forecasting revenues of US$796.7m and earnings per share (EPS) of US$0.59 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 23% to US$8.00per share.
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. It's clear from the latest estimates that Commercial Vehicle Group's rate of growth is expected to accelerate meaningfully, with the forecast 20% revenue growth noticeably faster than its historical growth of 2.6%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Commercial Vehicle Group to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Commercial Vehicle Group following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
Before you take the next step you should know about the 3 warning signs for Commercial Vehicle Group (1 is a bit unpleasant!) that we have uncovered.
If you’re looking to trade Commercial Vehicle Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade 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 email@example.com.