Yahoo Finance Elmo Software Limited (ASX:ELO) Just Released Its Annual Results And Analysts Are Updating Their Estimates
Shareholders might have noticed that Elmo Software Limited (ASX:ELO) filed its yearly result this time last week. The early response was not positive, with shares down 6.7% to AU$6.09 in the past week. Revenues came in at AU$50m, in line with expectations, while statutory losses per share were substantially higher than expected, at AU$0.25 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Elmo Software after the latest results.
View our latest analysis for Elmo Software
Taking into account the latest results, the most recent consensus for Elmo Software from five analysts is for revenues of AU$68.4m in 2021 which, if met, would be a huge 37% increase on its sales over the past 12 months. Losses are expected to increase substantially, hitting AU$0.30 per share. Before this earnings announcement, the analysts had been modelling revenues of AU$68.0m and losses of AU$0.28 per share in 2021. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although sales forecasts held steady, the consensus also made a moderate increase in its losses per share forecasts.
As a result, there was no major change to the consensus price target of AU$7.27, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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. Currently, the most bullish analyst values Elmo Software at AU$9.70 per share, while the most bearish prices it at AU$3.13. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Elmo Software's growth to accelerate, with the forecast 37% growth ranking favourably alongside historical growth of 25% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Elmo Software is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still 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. We have forecasts for Elmo Software going out to 2023, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Elmo Software (1 is potentially serious!) that you need to take into consideration.
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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