Evolution Mining Limited Just Missed Earnings - But Analysts Have Updated Their Models

Evolution Mining Limited (ASX:EVN) just released its latest interim report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at AU$1.3b, statutory earnings missed forecasts by an incredible 54%, coming in at just AU$0.052 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Evolution Mining

Taking into account the latest results, the consensus forecast from Evolution Mining's 15 analysts is for revenues of AU$3.04b in 2024. This reflects a substantial 25% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 181% to AU$0.23. In the lead-up to this report, the analysts had been modelling revenues of AU$3.06b and earnings per share (EPS) of AU$0.26 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at AU$3.53, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Evolution Mining analyst has a price target of AU$4.20 per share, while the most pessimistic values it at AU$2.90. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Evolution Mining's growth to accelerate, with the forecast 56% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 0.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Evolution Mining is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Evolution Mining. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at AU$3.53, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Evolution Mining. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Evolution Mining going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 4 warning signs for Evolution Mining that you need to take into consideration.

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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.