It’s been a good week for BigBen Interactive (EPA:BIG) shareholders, because the company has just released its latest full-year results, and the shares gained 8.5% to €12.48. It was an okay report, and revenues came in at €264m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from BigBen Interactive’s four analysts is for revenues of €284.7m in 2021, which would reflect a solid 8.0% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decrease 2.5% to €0.80 in the same period. Before this earnings report, the analysts had been forecasting revenues of €284.4m and earnings per share (EPS) of €1.02 in 2021. So there’s definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
The consensus price target held steady at €18.25, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic BigBen Interactive analyst has a price target of €18.80 per share, while the most pessimistic values it at €18.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 8.0%, in line with its 7.4% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 2.9% per year. So although BigBen Interactive is expected to maintain its revenue growth rate, it’s definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for BigBen Interactive. 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 BigBen Interactive going out to 2022, and you can see them free on our platform here.
Even so, be aware that BigBen Interactive is showing 2 warning signs in our investment analysis , you should know about…
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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. Thank you for reading.