MDA Ltd. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

It's been a pretty great week for MDA Ltd. (TSE:MDA) shareholders, with its shares surging 13% to CA$11.15 in the week since its latest full-year results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at CA$477m, statutory earnings beat expectations by a notable 33%, coming in at CA$0.02 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.

See our latest analysis for MDA

Taking into account the latest results, the consensus forecast from MDA's five analysts is for revenues of CA$766.9m in 2022, which would reflect a sizeable 61% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 593% to CA$0.17. Before this earnings report, the analysts had been forecasting revenues of CA$767.1m and earnings per share (EPS) of CA$0.25 in 2022. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The consensus price target held steady at CA$17.17, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 MDA at CA$20.00 per share, while the most bearish prices it at CA$13.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting MDA's growth to accelerate, with the forecast 61% annualised growth to the end of 2022 ranking favourably alongside historical growth of 21% per annum over the past year. 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. Factoring in the forecast acceleration in revenue, it's pretty clear that MDA 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 MDA. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at CA$17.17, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for MDA going out to 2024, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with MDA , and understanding this should be part of your investment process.

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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.