Australian Clinical Labs Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's been a mediocre week for Australian Clinical Labs Limited (ASX:ACL) shareholders, with the stock dropping 16% to AU$3.10 in the week since its latest half-yearly results. Revenue of AU$370m surpassed estimates by 4.0%, although statutory earnings per share missed badly, coming in 22% below expectations at AU$0.058 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Australian Clinical Labs

Taking into account the latest results, the most recent consensus for Australian Clinical Labs from eight analysts is for revenues of AU$747.0m in 2025. If met, it would imply a credible 2.6% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 15% to AU$0.18. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$736.4m and earnings per share (EPS) of AU$0.19 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at AU$3.81, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Australian Clinical Labs, with the most bullish analyst valuing it at AU$5.00 and the most bearish at AU$3.15 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. One thing stands out from these estimates, which is that Australian Clinical Labs is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.2% annualised growth until the end of 2025. If achieved, this would be a much better result than the 12% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.1% annually. So while Australian Clinical Labs' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Australian Clinical Labs. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Australian Clinical Labs going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Australian Clinical Labs , and understanding this should be part of your investment process.

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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.