The Lottery Corporation Limited Just Missed EPS By 12%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that The Lottery Corporation Limited (ASX:TLC) filed its annual result this time last week. The early response was not positive, with shares down 2.3% to AU$5.02 in the past week. Revenues were in line with forecasts, at AU$3.5b, although statutory earnings per share came in 12% below what the analysts expected, at AU$0.12 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.

Check out our latest analysis for Lottery

After the latest results, the 15 analysts covering Lottery are now predicting revenues of AU$3.83b in 2024. If met, this would reflect a decent 9.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 45% to AU$0.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$3.85b and earnings per share (EPS) of AU$0.18 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at AU$5.39, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Lottery, with the most bullish analyst valuing it at AU$5.95 and the most bearish at AU$5.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 9.0% growth on an annualised basis. That is in line with its 8.1% annual growth over the past three years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 8.2% per year. So although Lottery is expected to maintain its revenue growth rate, it's only growing at about the rate of 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 Lottery. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 Lottery going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Lottery (including 1 which can't be ignored) .

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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.