Cumulus Media Inc. (NASDAQ:CMLS) Analysts Are Pretty Bullish On The Stock After Recent Results

There's been a major selloff in Cumulus Media Inc. (NASDAQ:CMLS) shares in the week since it released its quarterly report, with the stock down 25% to US$1.56. Revenues were in line with expectations, at US$205m, while statutory losses ballooned to US$1.64 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Cumulus Media

Following last week's earnings report, Cumulus Media's two analysts are forecasting 2024 revenues to be US$834.8m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 77% to US$1.85. Before this latest report, the consensus had been expecting revenues of US$845.6m and US$1.85 per share in losses.

The consensus price target rose 14% to US$11.00, with the analysts increasing their valuations as the business executes in line with forecasts.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 4.4% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.2% per year. Although Cumulus Media's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cumulus Media's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with Cumulus Media (at least 1 which is concerning) , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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