Analysts Have Made A Financial Statement On LifeSpeak Inc.'s (TSE:LSPK) Full-Year Report

It's been a good week for LifeSpeak Inc. (TSE:LSPK) shareholders, because the company has just released its latest full-year results, and the shares gained 7.2% to CA$5.65. Revenues were in line with expectations, at CA$23m, while statutory losses ballooned to CA$0.76 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for LifeSpeak

Following the latest results, LifeSpeak's seven analysts are now forecasting revenues of CA$65.9m in 2022. This would be a substantial 183% improvement in sales compared to the last 12 months. Earnings are expected to improve, with LifeSpeak forecast to report a statutory profit of CA$0.15 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$65.9m and earnings per share (EPS) of CA$0.22 in 2022. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The consensus price target held steady at CA$12.29, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 LifeSpeak at CA$13.00 per share, while the most bearish prices it at CA$11.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting LifeSpeak is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that LifeSpeak's rate of growth is expected to accelerate meaningfully, with the forecast 183% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 38% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LifeSpeak to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for LifeSpeak. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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. We have forecasts for LifeSpeak going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with LifeSpeak , and understanding it should be part of your investment process.

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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.