Yahoo Finance Earnings Miss: Fly Leasing Limited Missed EPS By 14% And Analysts Are Revising Their Forecasts
It's been a pretty great week for Fly Leasing Limited (NYSE:FLY) shareholders, with its shares surging 16% to US$6.07 in the week since its latest quarterly results. It was not a great result overall. While revenues of US$122m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 14% to hit US$1.24 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Fly Leasing
Following the recent earnings report, the consensus from three analysts covering Fly Leasing is for revenues of US$386.2m in 2020, implying a substantial 30% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to nosedive 59% to US$2.86 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$377.9m and earnings per share (EPS) of US$2.85 in 2020. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.
Even though revenue forecasts increased, the consensus price target 23% to US$15.00, perhaps suggesting thatthe analysts have become more pessimistic about the lack of earnings growth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Fly Leasing, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$10.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 30%, a significant reduction from annual growth of 4.4% 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 5.0% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Fly Leasing is expected to lag the wider 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. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Fly Leasing going out to 2022, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Fly Leasing (at least 2 which are a bit unpleasant) , and understanding these should be part of your investment process.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
