Stock Analysis

Analysts Have Been Trimming Their Family Zone Cyber Safety Limited (ASX:FZO) Price Target After Its Latest Report

  •  Updated
ASX:FZO
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Investors in Family Zone Cyber Safety Limited (ASX:FZO) had a good week, as its shares rose 6.9% to close at AU$0.39 following the release of its yearly results. It was a pretty bad result overall; while revenues were in line with expectations at AU$45m, statutory losses exploded to AU$0.092 per share. The analyst 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 estimate suggests is in store for next year.

See our latest analysis for Family Zone Cyber Safety

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ASX:FZO Earnings and Revenue Growth September 1st 2022

After the latest results, the lone analyst covering Family Zone Cyber Safety are now predicting revenues of AU$82.5m in 2023. If met, this would reflect a substantial 83% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 65% to AU$0.025. Before this earnings announcement, the analyst had been modelling revenues of AU$82.5m and losses of AU$0.026 per share in 2023. It looks like there's been a modest increase in sentiment in the recent updates, with the analyst becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

Even with the lower forecast losses, the analyst lowered their valuations, with the average price target falling 20% to AU$0.66. It looks likethe analyst has become less optimistic about the overall business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analyst is definitely expecting Family Zone Cyber Safety's growth to accelerate, with the forecast 83% annualised growth to the end of 2023 ranking favourably alongside historical growth of 61% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Family Zone Cyber Safety to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Family Zone Cyber Safety's future valuation.

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 analyst estimates for Family Zone Cyber Safety going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Family Zone Cyber Safety that you need to take into consideration.

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About ASX:FZO

Family Zone Cyber Safety

Family Zone Cyber Safety Limited markets, distributes, and sells cyber safety products and services.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation2
Future Growth2
Past Performance0
Financial Health3
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Mediocre balance sheet and slightly overvalued.