Earnings Miss: SSP Group plc Missed EPS By 64% And Analysts Are Revising Their Forecasts

It's been a pretty great week for SSP Group plc (LON:SSPG) shareholders, with its shares surging 13% to UK£1.81 in the week since its latest yearly results. It looks like a pretty bad result, all things considered. Although revenues of UK£3.4b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 64% to hit UK£0.034 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for SSP Group

Taking into account the latest results, the consensus forecast from SSP Group's 15 analysts is for revenues of UK£3.71b in 2025. This reflects a solid 8.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 242% to UK£0.12. Before this earnings report, the analysts had been forecasting revenues of UK£3.67b and earnings per share (EPS) of UK£0.11 in 2025. So the consensus seems to have become somewhat more optimistic on SSP Group's earnings potential following these results.

There's been no major changes to the consensus price target of UK£2.49, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values SSP Group at UK£3.30 per share, while the most bearish prices it at UK£1.60. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that SSP Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.0% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.2% annually. So it's pretty clear that, while SSP Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SSP Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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. At Simply Wall St, we have a full range of analyst estimates for SSP Group going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for SSP Group you should be aware of, and 1 of them makes us a bit uncomfortable.

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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.