Investors in Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) had a good week, as its shares rose 9.4% to close at US$25.05 following the release of its quarterly results. Consensus Cloud Solutions beat revenue expectations by 2.8%, at US$88m. Statutory earnings per share (EPS) came in at US$1.09, some 2.5% short of analyst estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the five analysts covering Consensus Cloud Solutions, is for revenues of US$342.1m in 2025. This implies a small 2.6% reduction in Consensus Cloud Solutions' revenue over the past 12 months. Statutory earnings per share are predicted to rise 8.1% to US$4.93. In the lead-up to this report, the analysts had been modelling revenues of US$340.8m and earnings per share (EPS) of US$4.91 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$23.80. 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. The most optimistic Consensus Cloud Solutions analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$17.00. 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 Consensus Cloud Solutions shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Consensus Cloud Solutions' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.1% by the end of 2025. This indicates a significant reduction from annual growth of 8.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Consensus Cloud Solutions is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Consensus Cloud Solutions' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$23.80, 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. We have forecasts for Consensus Cloud Solutions going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Consensus Cloud Solutions you should know about.
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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.
