Results: Dream Unlimited Corp. Beat Earnings Expectations And Analysts Now Have New Forecasts

Dream Unlimited Corp. (TSE:DRM) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Statutory revenue of CA$145m and earnings of CA$1.32 both blasted past expectations, beating expectations by 49% and 221%, respectively, ahead of expectations. The analyst 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

View our latest analysis for Dream Unlimited

After the latest results, the consensus from Dream Unlimited's one analyst is for revenues of CA$474.0m in 2024, which would reflect an uncomfortable 18% decline in revenue compared to the last year of performance. Earnings are expected to improve, with Dream Unlimited forecast to report a statutory profit of CA$4.63 per share. Before this earnings report, the analyst had been forecasting revenues of CA$398.8m and earnings per share (EPS) of CA$3.54 in 2024. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Despite these upgrades,the analyst has not made any major changes to their price target of CA$36.50, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

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. One more thing stood out to us about these estimates, and it's the idea that Dream Unlimited's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 32% to the end of 2024. This tops off a historical decline of 3.7% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.2% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect Dream Unlimited to suffer worse than the wider industry.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dream Unlimited following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Dream Unlimited that you should be aware of.

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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.