Growth Investors: Industry Analysts Just Upgraded Their CubeSmart (NYSE:CUBE) Revenue Forecasts By 10%

Shareholders in CubeSmart (NYSE:CUBE) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that CubeSmart will make substantially more sales than they'd previously expected.

After the upgrade, the six analysts covering CubeSmart are now predicting revenues of US$989m in 2022. If met, this would reflect a sizeable 27% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to accumulate 6.9% to US$1.04. Before this latest update, the analysts had been forecasting revenues of US$897m and earnings per share (EPS) of US$1.11 in 2022. While revenue forecasts have increased, the analysts if anything seem a little more pessimistic, given the minor downgrade to earnings per share estimates in this update.

View our latest analysis for CubeSmart

The consensus price target was unchanged at US$60.30, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 CubeSmart, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$57.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting CubeSmart is an easy business to forecast or the underlying assumptions are obvious.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting CubeSmart's growth to accelerate, with the forecast 21% annualised growth to the end of 2022 ranking favourably alongside historical growth of 7.9% per annum 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 7.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CubeSmart to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for CubeSmart. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at CubeSmart.

Analysts are definitely bullish on CubeSmart, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 1 other concern we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.