Equals Group plc Just Beat EPS By 57%: Here's What Analysts Think Will Happen Next

Shareholders of Equals Group plc (LON:EQLS) will be pleased this week, given that the stock price is up 14% to UK£0.91 following its latest full-year results. Revenues were UK£70m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at UK£0.017, an impressive 57% ahead of estimates. 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.

View our latest analysis for Equals Group

After the latest results, the three analysts covering Equals Group are now predicting revenues of UK£88.4m in 2023. If met, this would reflect a major 27% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 139% to UK£0.043. Before this earnings report, the analysts had been forecasting revenues of UK£81.8m and earnings per share (EPS) of UK£0.029 in 2023. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a great increase in earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Equals Group 11% to UK£1.57on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Equals Group, with the most bullish analyst valuing it at UK£1.64 and the most bearish at UK£1.50 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Equals Group is an easy business to forecast or the the analysts are all using similar assumptions.

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. We can infer from the latest estimates that forecasts expect a continuation of Equals Group'shistorical trends, as the 27% annualised revenue growth to the end of 2023 is roughly in line with the 24% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 21% annually. So although Equals Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Equals Group following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Equals Group going out to 2025, and you can see them free on our platform here..

We also provide an overview of the Equals Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.