Earnings Update: BBTV Holdings Inc. (TSE:BBTV) Just Reported And Analysts Are Trimming Their Forecasts

It's been a sad week for BBTV Holdings Inc. (TSE:BBTV), who've watched their investment drop 13% to CA$2.81 in the week since the company reported its full-year result. BBTV Holdings reported revenues of CA$477m, in line with expectations, but it unfortunately also reported (statutory) losses of CA$1.59 per share, which were slightly larger than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for BBTV Holdings

After the latest results, the six analysts covering BBTV Holdings are now predicting revenues of CA$491.5m in 2022. If met, this would reflect a reasonable 3.1% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching CA$2.07 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of CA$530.3m and losses of CA$1.56 per share in 2022. While this year's revenue estimates dropped there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The average price target fell 46% to CA$6.92, implicitly signalling that lower earnings per share are a leading indicator for BBTV Holdings' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values BBTV Holdings at CA$12.50 per share, while the most bearish prices it at CA$3.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. We would highlight that BBTV Holdings' revenue growth is expected to slow, with the forecast 3.1% annualised growth rate until the end of 2022 being well below the historical 335% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than BBTV Holdings.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of BBTV Holdings' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple BBTV Holdings analysts - going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 5 warning signs for BBTV Holdings (of which 1 doesn't sit too well with us!) 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.