Shareholders of Climb Global Solutions, Inc. (NASDAQ:CLMB) will be pleased this week, given that the stock price is up 19% to US$78.80 following its latest second-quarter results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$92m, statutory earnings beat expectations by a notable 56%, coming in at US$0.75 per share. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Climb Global Solutions' solitary analyst is for revenues of US$433.6m in 2024. This reflects a decent 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 5.1% to US$3.16. In the lead-up to this report, the analyst had been modelling revenues of US$410.3m and earnings per share (EPS) of US$2.88 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analyst has increased their price target for Climb Global Solutions 18% to US$90.00on the back of these upgrades.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analyst is definitely expecting Climb Global Solutions' growth to accelerate, with the forecast 38% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.4% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Climb Global Solutions to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Climb Global Solutions following these results. Happily, they also upgraded their revenue estimates, and are forecasting them 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.

Following on from that line of thought, we think that 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 2025, which can be seen for free on our platform here.

You can also see our analysis of Climb Global Solutions' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.