There’s been a major selloff in CyberOptics Corporation (NASDAQ:CYBE) shares in the week since it released its third-quarter report, with the stock down 32% to US$26.25. Statutory earnings per share of US$0.24 unfortunately missed expectations by 12%, although it was encouraging to see revenues of US$21m exceed expectations by 3.6%. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, CyberOptics’ three analysts are now forecasting revenues of US$76.8m in 2021. This would be a solid 9.6% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 27% to US$0.79. Before this earnings report, the analysts had been forecasting revenues of US$78.0m and earnings per share (EPS) of US$0.87 in 2021. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$45.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic CyberOptics analyst has a price target of US$46.00 per share, while the most pessimistic values it at US$44.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CyberOptics’ past performance and to peers in the same industry. It’s clear from the latest estimates that CyberOptics’ rate of growth is expected to accelerate meaningfully, with the forecast 9.6% revenue growth noticeably faster than its historical growth of 5.2%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.8% next year. Factoring in the forecast acceleration in revenue, it’s pretty clear that CyberOptics is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$45.00, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple CyberOptics analysts – going out to 2021, and you can see them free on our platform here.
And what about risks? Every company has them, and we’ve spotted 1 warning sign for CyberOptics you should know about.
This article by Simply Wall St is general in nature. 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.