Analysts Are Updating Their SRG Global Limited (ASX:SRG) Estimates After Its Full-Year Results

It's been a good week for SRG Global Limited (ASX:SRG) shareholders, because the company has just released its latest yearly results, and the shares gained 9.8% to AU$0.95. Revenues of AU$1.1b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at AU$0.065, missing estimates by 4.0%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for SRG Global

Taking into account the latest results, the most recent consensus for SRG Global from four analysts is for revenues of AU$1.34b in 2025. If met, it would imply a major 25% increase on its revenue over the past 12 months. Per-share earnings are expected to expand 15% to AU$0.076. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$1.17b and earnings per share (EPS) of AU$0.078 in 2025. While revenue forecasts have increased substantially, the analysts are a little more pessimistic on earnings, suggesting that the growth does not come without cost.

The consensus price target was unchanged at AU$1.25, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic SRG Global analyst has a price target of AU$1.35 per share, while the most pessimistic values it at AU$1.13. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 clear from the latest estimates that SRG Global's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 15% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SRG Global to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.

With that in mind, we wouldn't be too quick to come to a conclusion on SRG Global. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple SRG Global analysts - going out to 2027, 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 1 warning sign for SRG Global that you need to be mindful 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.