Alliance Aviation Services Limited Just Missed EPS By 18%: Here's What Analysts Think Will Happen Next

By
Simply Wall St
Published
August 13, 2021
ASX:AQZ
Source: Shutterstock

Alliance Aviation Services Limited (ASX:AQZ) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. Alliance Aviation Services missed earnings this time around, with AU$309m revenue coming in 2.7% below what the analysts had modelled. Statutory earnings per share (EPS) of AU$0.21 also fell short of expectations by 18%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Alliance Aviation Services after the latest results.

Check out our latest analysis for Alliance Aviation Services

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ASX:AQZ Earnings and Revenue Growth August 13th 2021

Taking into account the latest results, the consensus forecast from Alliance Aviation Services' four analysts is for revenues of AU$415.9m in 2022, which would reflect a huge 35% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 25% to AU$0.26. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$397.3m and earnings per share (EPS) of AU$0.27 in 2022. So it's pretty clear consensus is mixed on Alliance Aviation Services after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

The consensus price target was unchanged at AU$5.03, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Alliance Aviation Services at AU$5.30 per share, while the most bearish prices it at AU$4.58. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Alliance Aviation Services' growth to accelerate, with the forecast 35% annualised growth to the end of 2022 ranking favourably alongside historical growth of 11% 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 25% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Alliance Aviation Services 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 Alliance Aviation Services. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Alliance Aviation Services going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - Alliance Aviation Services has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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