Ainsworth Game Technology Limited (ASX:AGI) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 5.8% to hit AU$220m. Statutory earnings per share (EPS) came in at AU$0.03, some 7.8% above whatthe analysts had expected. 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.
Taking into account the latest results, the consensus forecast from Ainsworth Game Technology's three analysts is for revenues of AU$252.5m in 2023, which would reflect a meaningful 15% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 67% to AU$0.058. In the lead-up to this report, the analysts had been modelling revenues of AU$247.0m and earnings per share (EPS) of AU$0.044 in 2023. So it seems there's been a definite increase in optimism about Ainsworth Game Technology's future following the latest results, with a considerable lift to the earnings per share forecasts in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of AU$1.08, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Ainsworth Game Technology analyst has a price target of AU$1.25 per share, while the most pessimistic values it at AU$0.98. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Ainsworth Game Technology is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Ainsworth Game Technology is forecast to grow faster in the future than it has in the past, with revenues expected to display 15% annualised growth until the end of 2023. If achieved, this would be a much better result than the 13% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.1% per year. So it looks like Ainsworth Game Technology is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Ainsworth Game Technology's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Ainsworth Game Technology going out to 2025, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
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