Yahoo Finance Ascential plc Just Missed Earnings - But Analysts Have Updated Their Models
It's been a mediocre week for Ascential plc (LON:ASCL) shareholders, with the stock dropping 12% to UK£2.77 in the week since its latest interim results. Sales of UK£144m surpassed estimates by 4.6%, although statutory earnings per share missed badly, coming in 85% below expectations at UK£0.019 per share. 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.
See our latest analysis for Ascential
Following last week's earnings report, Ascential's eleven analysts are forecasting 2020 revenues to be UK£324.6m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 32% to UK£0.12. Before this earnings announcement, the analysts had been modelling revenues of UK£324.5m and losses of UK£0.031 per share in 2020. While this year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
As a result, there was no major change to the consensus price target of UK£3.09, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Ascential analyst has a price target of UK£4.32 per share, while the most pessimistic values it at UK£2.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ascential's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Ascential's revenue growth will slow down substantially, with revenues next year expected to grow 0.1%, compared to a historical growth rate of 8.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Ascential is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at UK£3.09, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ascential analysts - going out to 2023, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Ascential that you should be aware of.
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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