APM Human Services International Limited Just Recorded A 11% Revenue Beat: Here's What Analysts Think

APM Human Services International Limited (ASX:APM) shareholders are probably feeling a little disappointed, since its shares fell 4.9% to AU$2.31 in the week after its latest half-year results. It was a mildly positive result, with revenues exceeding expectations at AU$854m, while statutory earnings per share (EPS) of AU$0.071 were in line with analyst forecasts. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for APM Human Services International

After the latest results, the seven analysts covering APM Human Services International are now predicting revenues of AU$1.93b in 2023. If met, this would reflect a substantial 23% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to dip 4.0% to AU$0.14 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$1.76b and earnings per share (EPS) of AU$0.16 in 2023. While next year's revenue estimates increased, there was also a real cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The consensus price target was unchanged at AU$3.53, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on APM Human Services International, with the most bullish analyst valuing it at AU$4.00 and the most bearish at AU$2.80 per share. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting APM Human Services International's growth to accelerate, with the forecast 52% annualised growth to the end of 2023 ranking favourably alongside historical growth of 32% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that APM Human Services International is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for APM Human Services International. 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.

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. At Simply Wall St, we have a full range of analyst estimates for APM Human Services International going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for APM Human Services International you should know about.

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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.