Currency Exchange International, Corp. (TSE:CXI) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasts think of the company following this report. Statutory earnings per share fell badly short of expectations, coming in at US$0.08, some 71% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$20m. The analyst 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 analyst has changed their mind on Currency Exchange International after the latest results.
Check out our latest analysis for Currency Exchange International
Taking into account the latest results, the most recent consensus for Currency Exchange International from single analyst is for revenues of US$87.6m in 2024. If met, it would imply an okay 3.1% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 38% to US$1.66. In the lead-up to this report, the analyst had been modelling revenues of US$88.9m and earnings per share (EPS) of US$2.03 in 2024. The analyst seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
It might be a surprise to learn that the consensus price target was broadly unchanged at CA$30.97, with the analyst clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Currency Exchange International’s revenue growth is expected to slow, with the forecast 6.4% annualised growth rate until the end of 2024 being well below the historical 23% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Currency Exchange International is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CA$30.97, with the latest estimates not enough to have an impact on their price target.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
It is also worth noting that we have found 2 warning signs for Currency Exchange International that you need to take into consideration.
Valuation is complex, but we’re helping make it simple.
Find out whether Currency Exchange International is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
Valuation is complex, but we’re helping make it simple.
Find out whether Currency Exchange International is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]
