Yahoo Finance LifeSpeak Inc. (TSE:LSPK) Just Reported, And Analysts Assigned A CA$0.50 Price Target
Last week saw the newest quarterly earnings release from LifeSpeak Inc. (TSE:LSPK), an important milestone in the company's journey to build a stronger business. Revenues of CA$12m came in a modest 3.5% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of CA$0.03 coming in a substantial 64% smaller than what the analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on LifeSpeak after the latest results.
View our latest analysis for LifeSpeak
Taking into account the latest results, the five analysts covering LifeSpeak provided consensus estimates of CA$50.2m revenue in 2024, which would reflect a noticeable 2.3% decline over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 56% to CA$0.20. Yet prior to the latest earnings, the analysts had been forecasting revenues of CA$52.8m and losses of CA$0.29 per share in 2024. Although the revenue estimates have fallen somewhat, LifeSpeak'sfuture looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular.
The analysts have cut their price target 15% to CA$0.50per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values LifeSpeak at CA$0.60 per share, while the most bearish prices it at CA$0.35. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 3.0% annualised decline to the end of 2024. That is a notable change from historical growth of 41% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - LifeSpeak is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 estimates - from multiple LifeSpeak analysts - going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - LifeSpeak has 3 warning signs we think you should be aware of.
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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.
