Yahoo Finance Earnings Miss: PEXA Group Limited Missed EPS By 11% And Analysts Are Revising Their Forecasts
It's been a good week for PEXA Group Limited (ASX:PXA) shareholders, because the company has just released its latest half-year results, and the shares gained 9.0% to AU$18.94. Results were mixed, with revenues of AU$145m exceeding expectations, even as earnings per share (EPS) came up short. Statutory earnings were AU$0.054 per share, -11% below whatthe analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for PEXA Group
Taking into account the latest results, PEXA Group's five analysts currently expect revenues in 2022 to be AU$266.6m, approximately in line with the last 12 months. PEXA Group is also expected to turn profitable, with statutory earnings of AU$0.10 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$254.2m and earnings per share (EPS) of AU$0.10 in 2022. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of AU$20.83, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic PEXA Group analyst has a price target of AU$25.60 per share, while the most pessimistic values it at AU$13.20. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.2% by the end of 2022. This indicates a significant reduction from annual growth of 51% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PEXA Group is expected to lag the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PEXA Group following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower 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 PEXA Group going out to 2024, and you can see them free on our platform here..
You can also see whether PEXA Group is carrying too much debt, and whether its balance sheet is healthy, for free 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.
