Stock Analysis

Voyager Digital Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

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It's been a mediocre week for Voyager Digital Ltd. (TSE:VOYG) shareholders, with the stock dropping 18% to CA$9.84 in the week since its latest quarterly results. Statutory earnings per share disappointed, coming in -93% short of expectations, at US$0.01. Fortunately revenue performance was a lot stronger, with revenues of US$165m arriving 12% ahead of predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Voyager Digital

TSX:VOYG Earnings and Revenue Growth February 17th 2022

Taking into account the latest results, the most recent consensus for Voyager Digital from seven analysts is for revenues of US$548.6m in 2022 which, if met, would be a substantial 32% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 74% to US$0.10 per share. In the lead-up to this report, the analysts had been modelling revenues of US$560.9m and earnings per share (EPS) of US$0.25 in 2022. The analysts have made an abrupt about-face on Voyager Digital, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.

The consensus price target fell 12% to CA$27.45, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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 Voyager Digital at CA$31.52 per share, while the most bearish prices it at CA$19.14. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Voyager Digital's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 74% growth on an annualised basis. This is compared to a historical growth rate of 153% over the past three years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 52% annually. Factoring in the forecast slowdown in growth, it's pretty clear that Voyager Digital is still expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Voyager Digital to become unprofitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Voyager Digital. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Voyager Digital analysts - going out to 2024, and you can see them free on our platform here.

Even so, be aware that Voyager Digital 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.