Earnings Beat: Here's What Draper Esprit plc (LON:GROW) Analysts Are Forecasting For This Year

Draper Esprit plc (LON:GROW) just released its latest full-year results and things are looking bullish. Statutory revenue and earnings both blasted past expectations, with revenue of UK£289m beating expectations by 69% and earnings per share (EPS) reaching UK£2.06, some 67% ahead of expectations. The analysts 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. 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 Draper Esprit

Taking into account the latest results, the current consensus, from the twin analysts covering Draper Esprit, is for revenues of UK£198.1m in 2022, which would reflect a stressful 31% reduction in Draper Esprit's sales over the past 12 months. Statutory earnings per share are expected to plunge 38% to UK£1.30 in the same period. In the lead-up to this report, the analysts had been modelling revenues of UK£198.1m and earnings per share (EPS) of UK£1.24 in 2022. So the consensus seems to have become somewhat more optimistic on Draper Esprit's earnings potential following these results.

There's been no major changes to the consensus price target of UK£9.74, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 31% by the end of 2022. This indicates a significant reduction from annual growth of 36% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Draper Esprit is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Draper Esprit's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Draper Esprit's revenues are expected to perform worse than the wider industry. The consensus price target held steady at UK£9.74, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Even so, be aware that Draper Esprit is showing 3 warning signs in our investment analysis , and 2 of those are a bit concerning...

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