Qurate Retail, Inc. Just Reported Full-Year Earnings: Have Analysts Changed Their Mind On The Stock?
One of the biggest stories of last week was how Qurate Retail, Inc. (NASDAQ:QRTE.A) shares plunged 34% in the week since its latest yearly results, closing yesterday at US$6.46. It looks like the results were pretty good overall. While revenues of US$13b were in line with analyst predictions, statutory losses were much smaller than expected, with Qurate Retail losing US$1.08 per share. 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.
See our latest analysis for Qurate Retail
Following the recent earnings report, the consensus fromfive analysts covering Qurate Retail expects revenues of US$13.1b in 2020, implying a noticeable 2.6% decline in sales compared to the last 12 months. Earnings are expected to improve, with Qurate Retail forecast to report a statutory profit of US$1.80 per share. Before this earnings report, analysts had been forecasting revenues of US$13.3b and earnings per share (EPS) of US$1.78 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$14.71, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Qurate Retail, with the most bullish analyst valuing it at US$18.50 and the most bearish at US$8.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that sales are expected to reverse, with the forecast 2.6% revenue decline a notable change from historical growth of 7.4% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 16% next year. It's pretty clear that Qurate Retail's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Qurate Retail's revenues are expected to perform worse than the wider 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Qurate Retail analysts - going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Qurate Retail's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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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