Last week, you might have seen that Systemax Inc. (NYSE:SYX) released its yearly result to the market. The early response was not positive, with shares down 6.2% to US$21.75 in the past week. The result was positive overall – although revenues of US$947m were in line with what analysts predicted, Systemax surprised by delivering a statutory profit of US$1.28 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether analysts have changed their mind on Systemax after the latest results.
Check out our latest analysis for Systemax
Taking into account the latest results, the most recent consensus for Systemax from two analysts is for revenues of US$998.3m in 2020, which is a satisfactory 5.4% increase on its sales over the past 12 months. Statutory earnings per share are expected to increase 8.0% to US$1.44. In the lead-up to this report, analysts had been modelling revenues of US$998.4m and earnings per share (EPS) of US$1.44 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.
The consensus price target fell -5.9% to US$32.00, suggesting that analysts might have been a bit enthusiastic in their previous valuation – or they were expecting the company to provide stronger guidance in the annual results.
In addition, we can look to Systemax’s past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. One thing stands out from these estimates, which is that analysts are forecasting Systemax to grow faster in the future than it has in the past, with revenues expected to grow 5.4%. If achieved, this would be a much better result than the 15% annual decline over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 4.7% next year. So it looks like Systemax is expected to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Systemax’s future valuation.
With that in mind, we wouldn’t be too quick to come to a conclusion on Systemax. Long-term earnings power is much more important than next year’s profits. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
We also provide an overview of the Systemax Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at [email protected] 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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