CPI Card Group Inc. (NASDAQ:PMTS) Analysts Are Reducing Their Forecasts For Next Year

The analysts covering CPI Card Group Inc. (NASDAQ:PMTS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from CPI Card Group's twin analysts is for revenues of US$457m in 2024, which would reflect a noticeable 2.4% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to sink 17% to US$2.44 in the same period. Previously, the analysts had been modelling revenues of US$512m and earnings per share (EPS) of US$3.66 in 2024. Indeed, we can see that the analysts are a lot more bearish about CPI Card Group's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for CPI Card Group

The consensus price target fell 38% to US$25.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.9% by the end of 2024. This indicates a significant reduction from annual growth of 15% 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 5.5% per year. It's pretty clear that CPI Card Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that CPI Card Group's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of CPI Card Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen 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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