Balchem Corporation (NASDAQ:BCPC) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of US$175m arriving 3.3% ahead of forecasts. Statutory earnings per share (EPS) were US$0.66, 5.6% ahead of estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Balchem's five analysts are now forecasting revenues of US$735.0m in 2021. This would be an okay 6.6% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to grow 10% to US$2.84. In the lead-up to this report, the analysts had been modelling revenues of US$731.9m and earnings per share (EPS) of US$2.82 in 2021. 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.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.1% to US$111. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 Balchem at US$126 per share, while the most bearish prices it at US$91.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. It's clear from the latest estimates that Balchem's rate of growth is expected to accelerate meaningfully, with the forecast 6.6% revenue growth noticeably faster than its historical growth of 4.7%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 5.6% per year. Balchem is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 in mind, we wouldn't be too quick to come to a conclusion on Balchem. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Balchem going out to 2022, and you can see them free on our platform here..
You can also view our analysis of Balchem's balance sheet, and whether we think Balchem is carrying too much debt, for free on our platform here.
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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