Benchmark Holdings plc (LON:BMK) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

Benchmark Holdings plc (LON:BMK) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of UK£125m beat expectations by a respectable 2.9%, although statutory losses per share increased. Benchmark Holdings lost UK£0.019, which was 21% more than what the analysts had included in their models. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Benchmark Holdings after the latest results.

View our latest analysis for Benchmark Holdings

Taking into account the latest results, the consensus forecast from Benchmark Holdings' four analysts is for revenues of UK£158.6m in 2022, which would reflect a substantial 27% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 79% to UK£0.0038. Before this earnings announcement, the analysts had been modelling revenues of UK£145.9m and losses of UK£0.0066 per share in 2022. So it seems there's been a definite increase in optimism about Benchmark Holdings' future following the latest consensus numbers, with a very promising decrease in the loss per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of UK£0.79, implying that their latest estimates don't have a long term impact on what they think the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Benchmark Holdings, with the most bullish analyst valuing it at UK£0.85 and the most bearish at UK£0.73 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. For example, we noticed that Benchmark Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 27% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 3.6% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.0% annually. Not only are Benchmark Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business 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.

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 Simply Wall St, we have a full range of analyst estimates for Benchmark Holdings going out to 2024, and you can see them free on our platform here..

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

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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.