Yahoo Finance Analysts Just Shaved Their Cambium Networks Corporation (NASDAQ:CMBM) Forecasts Dramatically
The analysts covering Cambium Networks Corporation (NASDAQ:CMBM) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the current consensus, from the nine analysts covering Cambium Networks, is for revenues of US$321m in 2022, which would reflect a small 4.4% reduction in Cambium Networks' sales over the past 12 months. Statutory earnings per share are anticipated to crater 82% to US$0.26 in the same period. Previously, the analysts had been modelling revenues of US$358m and earnings per share (EPS) of US$1.15 in 2022. Indeed, we can see that the analysts are a lot more bearish about Cambium Networks' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for Cambium Networks
The consensus price target fell 22% to US$36.00, with the weaker earnings outlook clearly leading analyst valuation estimates. 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. There are some variant perceptions on Cambium Networks, with the most bullish analyst valuing it at US$59.00 and the most bearish at US$19.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.4% by the end of 2022. This indicates a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cambium Networks 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Cambium Networks.
That said, the analysts might have good reason to be negative on Cambium Networks, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other warning signs we've identified.
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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.
