As you might know, Columbia Sportswear Company (NASDAQ:COLM) last week released its latest third-quarter, and things did not turn out so great for shareholders. Columbia Sportswear missed earnings this time around, with US$701m revenue coming in 8.6% below what the analysts had modelled. Statutory earnings per share (EPS) of US$0.94 also fell short of expectations by 16%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Columbia Sportswear from eleven analysts is for revenues of US$2.92b in 2021 which, if met, would be a solid 15% increase on its sales over the past 12 months. Per-share earnings are expected to leap 112% to US$4.00. Before this earnings report, the analysts had been forecasting revenues of US$2.97b and earnings per share (EPS) of US$4.21 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at US$96.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Columbia Sportswear, with the most bullish analyst valuing it at US$107 and the most bearish at US$81.00 per share. 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. It's clear from the latest estimates that Columbia Sportswear's rate of growth is expected to accelerate meaningfully, with the forecast 15% revenue growth noticeably faster than its historical growth of 5.1%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Columbia Sportswear to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Columbia Sportswear going out to 2024, and you can see them free on our platform here..
Even so, be aware that Columbia Sportswear is showing 2 warning signs in our investment analysis , you should know about...
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