Earnings Miss: Black Diamond Group Limited Missed EPS By 69% And Analysts Are Revising Their Forecasts

It's shaping up to be a tough period for Black Diamond Group Limited (TSE:BDI), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CA$74m missed by 19%, and statutory earnings per share of CA$0.02 fell short of forecasts by 69%. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Black Diamond Group

Following last week's earnings report, Black Diamond Group's six analysts are forecasting 2024 revenues to be CA$380.5m, approximately in line with the last 12 months. Statutory per share are forecast to be CA$0.43, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CA$398.2m and earnings per share (EPS) of CA$0.42 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus has made no major changes to the price target of CA$11.75, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Black Diamond Group, with the most bullish analyst valuing it at CA$14.00 and the most bearish at CA$10.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.8% by the end of 2024. This indicates a significant reduction from annual growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Black Diamond Group is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Black Diamond Group's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at CA$11.75, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Black Diamond Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Black Diamond Group analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Black Diamond Group is showing 3 warning signs in our investment analysis , you should know about...

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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.