Helloworld Travel Limited Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on Helloworld Travel Limited (ASX:HLO), given that the company fell short of expectations when it released its annual results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at AU$217m, statutory earnings missed forecasts by 11%, coming in at just AU$0.19 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Helloworld Travel

Following the latest results, Helloworld Travel's five analysts are now forecasting revenues of AU$239.4m in 2025. This would be a decent 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 14% to AU$0.22. Before this earnings report, the analysts had been forecasting revenues of AU$259.8m and earnings per share (EPS) of AU$0.27 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The consensus price target fell 15% to AU$2.97, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Helloworld Travel, with the most bullish analyst valuing it at AU$3.50 and the most bearish at AU$2.30 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Helloworld Travel is forecast to grow faster in the future than it has in the past, with revenues expected to display 10% annualised growth until the end of 2025. If achieved, this would be a much better result than the 21% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.3% annually. Not only are Helloworld Travel's revenues expected to improve, it seems that the analysts are also expecting it 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 Helloworld Travel. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Helloworld Travel's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Helloworld Travel going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Helloworld Travel 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.