As you might know, SiteOne Landscape Supply, Inc. (NYSE:SITE) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$752m, some 7.1% above estimates, and statutory earnings per share (EPS) coming in at US$1.08, 31% ahead of expectations. 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 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 consensus forecast from SiteOne Landscape Supply's eight analysts is for revenues of US$2.85b in 2021, which would reflect a notable 11% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$2.67, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$2.73b and earnings per share (EPS) of US$2.39 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a decent improvement in earnings per share in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of US$124, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 SiteOne Landscape Supply analyst has a price target of US$150 per share, while the most pessimistic values it at US$104. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 11%, in line with its 12% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.7% next year. So although SiteOne Landscape Supply is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
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 SiteOne Landscape Supply following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. 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.
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 SiteOne Landscape Supply going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for SiteOne Landscape Supply 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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