Results: Pool Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts
As you might know, Pool Corporation (NASDAQ:POOL) just kicked off its latest quarterly results with some very strong numbers. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at US$1.1b, while EPS were US$2.92 beating analyst models by 34%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Pool
After the latest results, the eight analysts covering Pool are now predicting revenues of US$4.19b in 2021. If met, this would reflect a decent 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 15% to US$9.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.93b and earnings per share (EPS) of US$8.42 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.
It will come as no surprise to learn that the analysts have increased their price target for Pool 12% to US$378on the back of these upgrades. 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 Pool at US$405 per share, while the most bearish prices it at US$350. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Pool's rate of growth is expected to accelerate meaningfully, with the forecast 14% revenue growth noticeably faster than its historical growth of 8.1%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pool 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 Pool following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Pool analysts - going out to 2024, 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 Pool you should know about.
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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