The latest analyst coverage could presage a bad day for CPI Card Group Inc. (NASDAQ:PMTS), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, the two analysts covering CPI Card Group provided consensus estimates of US$457m revenue in 2024, which would reflect a small 2.4% decline on its sales over the past 12 months. Statutory earnings per share are supposed to fall 17% to US$2.44 in the same period. Prior to this update, the analysts had been forecasting 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 substantial drop in revenue estimates and slashing their EPS estimates to boot.
View 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CPI Card Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 1.9% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CPI Card Group is expected to lag 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. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of CPI Card Group.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for CPI Card Group going out as far as 2024, and you can see them 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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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.
