CSE Global Limited (SGX:544) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of S$452m arriving 7.5% ahead of forecasts. Statutory earnings per share (EPS) were S$0.047, 2.9% ahead of 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CSE Global after the latest results.

Check out our latest analysis for CSE Global

After the latest results, the five analysts covering CSE Global are now predicting revenues of S$500.9m in 2020. If met, this would reflect a meaningful 11% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to increase 7.7% to S$0.051. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$539.2m and earnings per share (EPS) of S$0.056 in 2020. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The consensus price target fell 9.2% to S$0.63, with the weaker earnings outlook clearly leading 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 CSE Global, with the most bullish analyst valuing it at S$0.73 and the most bearish at S$0.45 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. For example, we noticed that CSE Global's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 11%, well above its historical decline of 0.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 10% per year. So it looks like CSE Global is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of CSE Global's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for CSE Global going out to 2022, and you can see them free on our platform here.

Even so, be aware that CSE Global is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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