Anexo Group Plc Beat Revenue Forecasts By 5.3%: Here's What Analysts Are Forecasting Next

Anexo Group Plc (LON:ANX) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a pretty mixed result, with revenues beating expectations to hit UK£87m. Statutory earnings fell 3.6% short of analyst forecasts, reaching UK£0.11 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Anexo Group

Taking into account the latest results, the consensus forecast from Anexo Group's six analysts is for revenues of UK£92.4m in 2021, which would reflect a satisfactory 6.5% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 27% to UK£0.14. In the lead-up to this report, the analysts had been modelling revenues of UK£91.7m and earnings per share (EPS) of UK£0.15 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at UK£2.21, 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. The most optimistic Anexo Group analyst has a price target of UK£2.80 per share, while the most pessimistic values it at UK£1.90. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 Anexo Group's revenue growth is expected to slow, with the forecast 6.5% annualised growth rate until the end of 2021 being well below the historical 19% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Anexo Group is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Anexo Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at UK£2.21, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Anexo Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Anexo Group going out to 2023, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Anexo Group that we have uncovered.

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