Yahoo Finance Skyline Champion Corporation Just Recorded A 41% EPS Beat: Here's What Analysts Are Forecasting Next
Investors in Skyline Champion Corporation (NYSE:SKY) had a good week, as its shares rose 3.4% to close at US$26.78 following the release of its quarterly results. It looks like a credible result overall - although revenues of US$322m were what the analysts expected, Skyline Champion surprised by delivering a (statutory) profit of US$0.31 per share, an impressive 41% above what was forecast. Following the result, the analysts have 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Skyline Champion
Taking into account the latest results, Skyline Champion's five analysts currently expect revenues in 2021 to be US$1.24b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 9.3% to US$0.84 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.24b and earnings per share (EPS) of US$0.84 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 15% to US$32.33despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Skyline Champion's earnings by assigning a price premium. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Skyline Champion analyst has a price target of US$37.00 per share, while the most pessimistic values it at US$26.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's pretty clear that there is an expectation that Skyline Champion's revenue growth will slow down substantially, with revenues next year expected to grow 0.2%, compared to a historical growth rate of 7.5% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Skyline Champion.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Skyline Champion's revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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. We have forecasts for Skyline Champion going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Skyline Champion Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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.
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