The annual results for Computershare Limited (ASX:CPU) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of US$2.3b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.3% to hit US$0.34 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. 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 current consensus from Computershare's twelve analysts is for revenues of US$2.60b in 2022, which would reflect a solid 11% increase on its sales over the past 12 months. Statutory earnings per share are forecast to sink 19% to US$0.27 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.57b and earnings per share (EPS) of US$0.27 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of AU$18.03, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Computershare at AU$23.10 per share, while the most bearish prices it at AU$15.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. It's clear from the latest estimates that Computershare's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 2.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 24% annually. So it's clear that despite the acceleration in growth, Computershare is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than 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.
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. We have estimates - from multiple Computershare analysts - 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 Computershare (including 1 which is a bit unpleasant) .
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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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