Clearfield, Inc. (NASDAQ:CLFD) Analysts Just Cut Their EPS Forecasts Substantially

One thing we could say about the analysts on Clearfield, Inc. (NASDAQ:CLFD) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the five analysts covering Clearfield, is for revenues of US$282m in 2023, which would reflect a definite 13% reduction in Clearfield's sales over the past 12 months. Statutory earnings per share are supposed to crater 49% to US$1.83 in the same period. Prior to this update, the analysts had been forecasting revenues of US$366m and earnings per share (EPS) of US$3.98 in 2023. Indeed, we can see that the analysts are a lot more bearish about Clearfield's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Clearfield

It'll come as no surprise then, to learn that the analysts have cut their price target 38% to US$53.75. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Clearfield analyst has a price target of US$86.00 per share, while the most pessimistic values it at US$34.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would highlight that sales are expected to reverse, with a forecast 24% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 33% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Clearfield is expected to lag 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 Clearfield. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Clearfield's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 1 other warning sign we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.