A week ago, Capstar Financial Holdings, Inc. (NASDAQ:CSTR) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. The company beat both earnings and revenue forecasts, with revenue of US$34m, some 9.6% above estimates, and statutory earnings per share (EPS) coming in at US$0.34, 20% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the four analysts covering Capstar Financial Holdings are now predicting revenues of US$116.2m in 2021. If met, this would reflect a major 32% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$1.08, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$116.2m and earnings per share (EPS) of US$1.08 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$12.63, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Capstar Financial Holdings, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$12.00 per share. This is a very narrow spread of estimates, implying either that Capstar Financial Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Capstar Financial Holdings' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Capstar Financial Holdings'historical trends, as next year's 32% revenue growth is roughly in line with 32% annual revenue growth over the past three years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.4% next year. So it's pretty clear that Capstar Financial Holdings is forecast to grow substantially faster than its industry.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$12.63, with the latest estimates not enough to have an impact on their price targets.
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 Simply Wall St, we have a full range of analyst estimates for Capstar Financial Holdings going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Capstar Financial Holdings .
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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