Earnings Beat: The Pebble Group Plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in The Pebble Group Plc (LON:PEBB) had a good week, as its shares rose 3.7% to close at UK£1.40 following the release of its annual results. Revenues were UK£82m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at UK£0.024, an impressive 56% ahead of estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Pebble Group

After the latest results, the dual analysts covering Pebble Group are now predicting revenues of UK£102.4m in 2021. If met, this would reflect a substantial 24% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 38% to UK£0.034. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£102.9m and earnings per share (EPS) of UK£0.036 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 11% to UK£1.53, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

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. It's clear from the latest estimates that Pebble Group's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 1.6% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pebble Group to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

You can also see our analysis of Pebble Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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