CubeSmart Just Released Its Full-Year Earnings: Here's What Analysts Think
CubeSmart (NYSE:CUBE) shares fell 2.2% to US$32.26 in the week since its latest yearly results. CubeSmart reported US$644m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.88 beat expectations, being 2.6% higher than what analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
View our latest analysis for CubeSmart
Following the latest results, CubeSmart's eight analysts are now forecasting revenues of US$679.0m in 2020. This would be a reasonable 5.4% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to shrink 9.4% to US$0.80 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$677.8m and earnings per share (EPS) of US$0.78 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$31.73, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values CubeSmart at US$36.00 per share, while the most bearish prices it at US$28.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to CubeSmart's performance in recent years. It's pretty clear that analysts expect CubeSmart's revenue growth will slow down substantially, with revenues next year expected to grow 5.4%, compared to a historical growth rate of 10% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 4.9% per year. So it's pretty clear that, while CubeSmart's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around CubeSmart's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for CubeSmart going out to 2024, and you can see them free on our platform here.
You can also see whether CubeSmart is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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.
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