CBIZ, Inc. (NYSE:CBZ) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 3.7% to hit US$238m. CBIZ reported statutory earnings per share (EPS) US$0.36, which was a notable 20% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for CBIZ from three analysts is for revenues of US$1.00b in 2021 which, if met, would be an okay 4.8% increase on its sales over the past 12 months. Statutory earnings per share are predicted to rise 2.8% to US$1.47. In the lead-up to this report, the analysts had been modelling revenues of US$1.01b and earnings per share (EPS) of US$1.44 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$28.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic CBIZ analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$27.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 4.8%, in line with its 5.6% annual growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 7.8% next year. So it's pretty clear that CBIZ is expected to grow slower than similar companies in the same 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 CBIZ following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that CBIZ's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$28.50, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for CBIZ going out to 2022, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for CBIZ that we have uncovered.
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