Yahoo Finance The Nearmap Ltd (ASX:NEA) Half-Year Results Are Out And Analysts Have Published New Forecasts
Nearmap Ltd (ASX:NEA) just released its interim report and things are looking bullish. Results overall were solid, with revenues arriving 2.4% better than analyst forecasts at AU$55m. Higher revenues also resulted in substantially lower statutory losses which, at AU$0.02 per share, were 2.4% smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Nearmap after the latest results.
Check out our latest analysis for Nearmap
After the latest results, the seven analysts covering Nearmap are now predicting revenues of AU$111.5m in 2021. If met, this would reflect a notable 15% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to AU$0.057. Before this latest report, the consensus had been expecting revenues of AU$110.9m and AU$0.06 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
There's been no major changes to the consensus price target of AU$3.11, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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 Nearmap at AU$4.10 per share, while the most bearish prices it at AU$2.40. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's pretty clear that there is an expectation that Nearmap's revenue growth will slow down substantially, with revenues next year expected to grow 15%, compared to a historical growth rate of 24% over the past year. Compare this to the 96 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 17% per year. So it's pretty clear that, while Nearmap's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at AU$3.11, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for Nearmap going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Nearmap 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
