Earnings Beat: 3P Learning Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, 3P Learning Limited (ASX:3PL) recently reported its annual numbers. Revenues were AU$107m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at AU$0.023, an impressive 130% ahead of 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for 3P Learning

After the latest results, the dual analysts covering 3P Learning are now predicting revenues of AU$115.7m in 2024. If met, this would reflect a reasonable 7.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 4.5% to AU$0.022 in the same period. In the lead-up to this report, the analysts had been modelling revenues of AU$116.0m and earnings per share (EPS) of AU$0.02 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The average the analysts price target fell 10% to AU$1.53, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them.

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 3P Learning's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.8% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than 3P Learning.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards 3P Learning following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 analyst estimates for 3P Learning going out as far as 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for 3P Learning that you should be aware 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.