Tristel plc Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Tristel plc (LON:TSTL) just released its yearly report and things are looking bullish. The company beat forecasts, with revenue of UK£36m, some 3.9% above estimates, and statutory earnings per share (EPS) coming in at UK£0.093, 26% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tristel after the latest results.

View our latest analysis for Tristel

Taking into account the latest results, the most recent consensus for Tristel from three analysts is for revenues of UK£40.2m in 2024. If met, it would imply a decent 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 13% to UK£0.11. In the lead-up to this report, the analysts had been modelling revenues of UK£39.1m and earnings per share (EPS) of UK£0.097 in 2024. 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.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of UK£4.47, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Tristel at UK£5.25 per share, while the most bearish prices it at UK£3.75. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Tristel's growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tristel is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Tristel's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them 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. We have forecasts for Tristel going out to 2026, and you can see them free on our platform here.

Even so, be aware that Tristel is showing 2 warning signs in our investment analysis , you should know about...

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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.