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Analysts Have Made A Financial Statement On Domain Holdings Australia Limited's (ASX:DHG) Full-Year Report

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It's been a pretty great week for Domain Holdings Australia Limited (ASX:DHG) shareholders, with its shares surging 12% to AU$5.19 in the week since its latest yearly results. The result was positive overall - although revenues of AU$289m were in line with what the analysts predicted, Domain Holdings Australia surprised by delivering a statutory profit of AU$0.059 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Domain Holdings Australia

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earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Domain Holdings Australia from eleven analysts is for revenues of AU$330.2m in 2022 which, if met, would be a notable 14% increase on its sales over the past 12 months. Per-share earnings are expected to leap 41% to AU$0.083. Before this earnings report, the analysts had been forecasting revenues of AU$331.9m and earnings per share (EPS) of AU$0.082 in 2022. 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 analysts reconfirmed their price target of AU$5.14, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Domain Holdings Australia at AU$5.70 per share, while the most bearish prices it at AU$3.80. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Domain Holdings Australia's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 14% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 7.6% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.5% annually. So it looks like Domain Holdings Australia is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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.

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 Domain Holdings Australia going out to 2024, and you can see them free on our platform here.

You can also view our analysis of Domain Holdings Australia's balance sheet, and whether we think Domain Holdings Australia is carrying too much debt, for 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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