Stock Analysis

MNF Group Limited (ASX:MNF) Interim Results Just Came Out: Here's What Analysts Are Forecasting For This Year

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ASX:SYM
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Shareholders of MNF Group Limited (ASX:MNF) will be pleased this week, given that the stock price is up 18% to AU$5.00 following its latest interim results. It was a credible result overall, with revenues of AU$112m and statutory earnings per share of AU$0.15 both in line with analyst estimates, showing that MNF Group is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 MNF Group

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ASX:MNF Earnings and Revenue Growth February 24th 2021

Taking into account the latest results, the most recent consensus for MNF Group from three analysts is for revenues of AU$248.5m in 2021 which, if met, would be a credible 7.6% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 41% to AU$0.21. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$244.5m and earnings per share (EPS) of AU$0.17 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the sizeable expansion in earnings per share expectations following these results.

There's been no major changes to the consensus price target of AU$6.37, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. Currently, the most bullish analyst values MNF Group at AU$7.15 per share, while the most bearish prices it at AU$5.67. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of MNF Group'shistorical trends, as next year's 7.6% revenue growth is roughly in line with 7.1% annual revenue growth over the past year. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.7% next year. So it's pretty clear that MNF Group is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around MNF Group's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 forecasts for MNF Group going out to 2023, and you can see them free on our platform here.

We also provide an overview of the MNF Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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