Investors in Money3 Corporation Limited (ASX:MNY) had a good week, as its shares rose 3.9% to close at AU$3.50 following the release of its full-year results. Money3 reported in line with analyst predictions, delivering revenues of AU$145m and statutory earnings per share of AU$0.20, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Money3 from three analysts is for revenues of AU$186.2m in 2022 which, if met, would be a substantial 28% increase on its sales over the past 12 months. Per-share earnings are expected to swell 14% to AU$0.23. Before this earnings report, the analysts had been forecasting revenues of AU$179.2m and earnings per share (EPS) of AU$0.23 in 2022. There doesn't appear to have been a major change in sentiment following the results, other than the modest lift to revenue estimates.
The consensus price target increased 14% to AU$4.16, with an improved revenue forecast carrying the promise of a more valuable business, in time. 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. The most optimistic Money3 analyst has a price target of AU$4.20 per share, while the most pessimistic values it at AU$4.13. 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. It's clear from the latest estimates that Money3's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 6.4% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 33% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Money3 is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Money3 going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Money3 (including 1 which doesn't sit too well with us) .
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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.
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