Revenue Beat: Ninety One Group Beat Analyst Estimates By 8.1%

It's been a good week for Ninety One Group (LON:N91) shareholders, because the company has just released its latest half-yearly results, and the shares gained 3.2% to UK£2.34. It was a workmanlike result, with revenues of UK£297m coming in 8.1% ahead of expectations, and statutory earnings per share of UK£0.17, in line with analyst appraisals. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ninety One Group after the latest results.

View our latest analysis for Ninety One Group

Taking into account the latest results, the current consensus, from the five analysts covering Ninety One Group, is for revenues of UK£575.5m in 2021, which would reflect a small 5.3% reduction in Ninety One Group's sales over the past 12 months. Statutory earnings per share are forecast to sink 13% to UK£0.15 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£562.3m and earnings per share (EPS) of UK£0.14 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Ninety One Group 9.3% to UK£2.46on the back of these upgrades. 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. There are some variant perceptions on Ninety One Group, with the most bullish analyst valuing it at UK£2.65 and the most bearish at UK£2.10 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ninety One Group's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 5.3%, a significant reduction from annual growth of 20% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.4% next year. It's pretty clear that Ninety One Group's revenues are expected to perform substantially worse 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 Ninety One Group following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ninety One Group analysts - going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Ninety One Group that you need to take into consideration.

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