MyState Limited (ASX:MYS) Released Earnings Last Week And Analysts Lifted Their Price Target To AU$5.20

MyState Limited (ASX:MYS) came out with its half-yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues came in 2.1% below expectations, at AU$69m. Statutory earnings per share were relatively better off, with a per-share profit of AU$0.33 being roughly in line with analyst estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for MyState

Taking into account the latest results, the consensus forecast from MyState's two analysts is for revenues of AU$139.0m in 2021, which would reflect a satisfactory 6.7% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to step up 12% to AU$0.39. Before this earnings report, the analysts had been forecasting revenues of AU$136.2m and earnings per share (EPS) of AU$0.38 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analysts have increased their price target for MyState 8.3% to AU$5.20on the back of these upgrades.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that MyState's rate of growth is expected to accelerate meaningfully, with the forecast 6.7% revenue growth noticeably faster than its historical growth of 0.2%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.4% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that MyState is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around MyState's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for MyState going out as far as 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for MyState (1 is concerning!) that you need to be mindful of.

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