Results: Camping World Holdings, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts
As you might know, Camping World Holdings, Inc. (NYSE:CWH) just kicked off its latest third-quarter results with some very strong numbers. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 11% higher than the analysts had forecast, at US$1.7b, while EPS of US$1.44 beat analyst models by 18%. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Camping World Holdings
Taking into account the latest results, the current consensus from Camping World Holdings’ nine analysts is for revenues of US$5.64b in 2021, which would reflect a credible 6.9% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 56% to US$3.24. In the lead-up to this report, the analysts had been modelling revenues of US$5.50b and earnings per share (EPS) of US$3.16 in 2021. It looks like there’s been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$39.50, suggesting that the forecast performance does not have a long term impact on the company’s valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. The most optimistic Camping World Holdings analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$30.00. 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 Camping World Holdings shareholders.
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. It’s pretty clear that there is an expectation that Camping World Holdings’ revenue growth will slow down substantially, with revenues next year expected to grow 6.9%, compared to a historical growth rate of 10% 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 9.0% next 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 Camping World Holdings.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Camping World Holdings following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at US$39.50, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have forecasts for Camping World Holdings going out to 2022, and you can see them free on our platform here.
Don’t forget that there may still be risks. For instance, we’ve identified 5 warning signs for Camping World Holdings that you should be aware of.
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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