Objective Corporation Limited (ASX:OCL) Just Released Its Full-Year Results And Analysts Are Updating Their Estimates

Last week, you might have seen that Objective Corporation Limited (ASX:OCL) released its full-year result to the market. The early response was not positive, with shares down 7.3% to AU$12.56 in the past week. The result was positive overall - although revenues of AU$110m were in line with what the analysts predicted, Objective surprised by delivering a statutory profit of AU$0.22 per share, modestly greater than expected. 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.

Check out our latest analysis for Objective

After the latest results, the five analysts covering Objective are now predicting revenues of AU$119.1m in 2024. If met, this would reflect a credible 7.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 64% to AU$0.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$125.7m and earnings per share (EPS) of AU$0.27 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the sizeable expansion in to the earnings per share numbers.

The consensus has made no major changes to the price target of AU$13.47, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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 Objective, with the most bullish analyst valuing it at AU$15.00 and the most bearish at AU$9.37 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Objective's past performance and to peers in the same industry. We would highlight that Objective's revenue growth is expected to slow, with the forecast 7.9% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it seems obvious that Objective is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Objective following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. 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 Objective analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.