Yahoo Finance Earnings Miss: CAE Inc. Missed EPS By 31% And Analysts Are Revising Their Forecasts
Shareholders might have noticed that CAE Inc. (TSE:CAE) filed its quarterly result this time last week. The early response was not positive, with shares down 6.2% to CA$26.06 in the past week. Statutory earnings per share fell badly short of expectations, coming in at CA$0.17, some 31% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CA$1.1b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CAE after the latest results.
View our latest analysis for CAE
Taking into account the latest results, the current consensus from CAE's twelve analysts is for revenues of CA$4.78b in 2025. This would reflect a modest 5.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 46% to CA$1.26. Before this earnings report, the analysts had been forecasting revenues of CA$4.81b and earnings per share (EPS) of CA$1.40 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
It might be a surprise to learn that the consensus price target fell 6.6% to CA$32.83, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values CAE at CA$39.00 per share, while the most bearish prices it at CA$26.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await CAE shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that CAE's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 6.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CAE.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CAE. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for CAE going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for CAE (1 is concerning!) that we have uncovered.
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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.
