Shareholders in Cumulus Media Inc. (NASDAQ:CMLS) had a terrible week, as shares crashed 25% to US$1.56 in the week since its latest second-quarter results. It was a pretty bad result overall; while revenues were in line with expectations at US$205m, statutory losses exploded to US$1.64 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following last week's earnings report, Cumulus Media's twin analysts are forecasting 2024 revenues to be US$834.8m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 77% to US$1.85. Before this earnings announcement, the analysts had been modelling revenues of US$845.6m and losses of US$1.85 per share in 2024.

The average price target fell 14% to US$11.00, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts.

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. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 4.4% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.2% annually. Although Cumulus Media's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 5 warning signs for Cumulus Media (1 shouldn't be ignored!) that 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.

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