The East Side Games Group Inc. (TSE:EAGR) Second-Quarter Results Are Out And Analysts Have Published New Forecasts

The quarterly results for East Side Games Group Inc. (TSE:EAGR) were released last week, making it a good time to revisit its performance. Results look mixed - while revenue fell marginally short of analyst estimates at CA$21m, statutory earnings were in line with expectations, at CA$0.01 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for East Side Games Group

After the latest results, the three analysts covering East Side Games Group are now predicting revenues of CA$86.0m in 2024. If met, this would reflect an okay 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 69% to CA$0.08. Before this earnings report, the analysts had been forecasting revenues of CA$87.4m and earnings per share (EPS) of CA$0.08 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CA$1.80. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic East Side Games Group analyst has a price target of CA$3.00 per share, while the most pessimistic values it at CA$0.90. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that East Side Games Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 7.9% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.6% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.9% annually. So it looks like East Side Games Group is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CA$1.80, 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 East Side Games Group going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for East Side Games Group that you need to take into consideration.

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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.