Yahoo Finance Envirosuite Limited (ASX:EVS) Just Reported And Analysts Have Been Lifting Their Price Targets
Investors in Envirosuite Limited (ASX:EVS) had a good week, as its shares rose 7.7% to close at AU$0.14 following the release of its full-year results. Sales hit AU$49m in line with forecasts, although the company reported a statutory loss per share of AU$0.012 that was somewhat smaller than the analyst expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.
View our latest analysis for Envirosuite
After the latest results, the solitary analyst covering Envirosuite are now predicting revenues of AU$57.1m in 2022. If met, this would reflect a notable 18% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 18% from last year to AU$0.01. Before this earnings announcement, the analyst had been modelling revenues of AU$57.0m and losses of AU$0.005 per share in 2022. So it's pretty clear the analyst has mixed opinions on Envirosuite even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase to per-share losses.
Despite expectations of heavier losses next year,the analyst has lifted their price target 17% to AU$0.17, perhaps implying these losses are not expected to be recurring over the long term.
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. We would highlight that Envirosuite's revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2022 being well below the historical 73% p.a. growth over the last five years. Compare this to the 105 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it looks like Envirosuite is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Envirosuite. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.
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 analyst estimates for Envirosuite going out as far as 2024, and you can see them free on our platform here.
Even so, be aware that Envirosuite is showing 3 warning signs in our investment analysis , you should know about...
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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