EML Payments Limited (ASX:EML) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a mediocre week for EML Payments Limited (ASX:EML) shareholders, with the stock dropping 11% to AU$0.72 in the week since its latest annual results. Revenues of AU$217m missed forecasts by 18%, but at least statutory losses were much smaller than expected, with per-share losses of AU$0.026 coming in 51% smaller than what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for EML Payments

Following last week's earnings report, EML Payments' four analysts are forecasting 2025 revenues to be AU$214.1m, approximately in line with the last 12 months. Earnings are expected to improve, with EML Payments forecast to report a statutory profit of AU$0.049 per share. In the lead-up to this report, the analysts had been modelling revenues of AU$232.2m and earnings per share (EPS) of AU$0.039 in 2025. Although the analysts have lowered their revenue forecasts, they've also made a considerable lift to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The analysts have cut their price target 5.9% to AU$1.00per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values EML Payments at AU$1.17 per share, while the most bearish prices it at AU$0.90. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.5% by the end of 2025. This indicates a significant reduction from annual growth of 20% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 9.1% per year. So it's pretty clear that EML Payments' revenues are expected to shrink slower than the wider industry.

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 EML Payments following these results. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of EML Payments' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple EML Payments analysts - going out to 2027, and you can see them free on our platform here.

You can also view our analysis of EML Payments' balance sheet, and whether we think EML Payments is carrying too much debt, for free on our platform here.

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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.