Consensus Cloud Solutions, Inc. Just Missed EPS By 12%: Here's What Analysts Think Will Happen Next

Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was not a great result overall. While revenues of US$91m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit US$0.78 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Consensus Cloud Solutions

Following the latest results, Consensus Cloud Solutions' six analysts are now forecasting revenues of US$376.9m in 2023. This would be a modest 3.4% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$3.59, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$376.7m and earnings per share (EPS) of US$3.59 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$59.50. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Consensus Cloud Solutions analyst has a price target of US$78.00 per share, while the most pessimistic values it at US$50.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. The analysts are definitely expecting Consensus Cloud Solutions' growth to accelerate, with the forecast 4.5% annualised growth to the end of 2023 ranking favourably alongside historical growth of 2.1% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Consensus Cloud Solutions is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Consensus Cloud Solutions' revenues are expected to perform worse 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. We have forecasts for Consensus Cloud Solutions going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Consensus Cloud Solutions has 3 warning signs (and 2 which are potentially serious) we think you should know about.

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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.