Climb Global Solutions, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Climb Global Solutions, Inc. (NASDAQ:CLMB) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of US$85m, some 6.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.74, 35% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

View our latest analysis for Climb Global Solutions

Taking into account the latest results, the consensus forecast from Climb Global Solutions' sole analyst is for revenues of US$359.3m in 2023, which would reflect a meaningful 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 4.6% to US$3.02. In the lead-up to this report, the analyst had been modelling revenues of US$335.8m and earnings per share (EPS) of US$3.17 in 2023. Overall it looks as though the analyst was a bit mixed on the latest results. Although there was a a meaningful to revenue, the consensus also made a small dip in its earnings per share forecasts.

The analyst also upgraded Climb Global Solutions' price target 50% to US$60.00, implying that the higher sales are expected to generate enough value to offset the forecast decline in earnings.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Climb Global Solutions' past performance and to peers in the same industry. The analyst is definitely expecting Climb Global Solutions' growth to accelerate, with the forecast 18% annualised growth to the end of 2023 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Climb Global Solutions is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Climb Global Solutions. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Climb Global Solutions. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Climb Global Solutions you should be aware of.

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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.