It's been a pretty great week for Compass Diversified (NYSE:CODI) shareholders, with its shares surging 11% to US$12.07 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$424m were what the analysts expected, Compass Diversified surprised by delivering a statutory profit of US$0.86 per share, instead of the previously forecast loss. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Compass Diversified after the latest results.

Taking into account the latest results, the five analysts covering Compass Diversified provided consensus estimates of US$1.68b revenue in 2026, which would reflect a small 6.4% decline over the past 12 months. Losses are predicted to fall substantially, shrinking 76% to US$0.45. Before this earnings announcement, the analysts had been modelling revenues of US$1.70b and losses of US$1.50 per share in 2026. Although the revenue estimates have not really changed Compass Diversified'sfuture looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.

The average price target rose 25% to US$16.00, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. 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. The most optimistic Compass Diversified analyst has a price target of US$18.00 per share, while the most pessimistic values it at US$15.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. Over the past five years, revenues have declined around 0.6% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 12% decline in revenue until the end of 2026. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.9% annually. So while a broad number of companies are forecast to grow, unfortunately Compass Diversified is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Compass Diversified going out to 2027, and you can see them free on our platform here.

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.