The Pebble Group plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Investors in The Pebble Group plc (LON:PEBB) had a good week, as its shares rose 4.8% to close at UK£0.65 following the release of its full-year results. Revenues were UK£124m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of UK£0.035 were also better than expected, beating analyst predictions by 12%. 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 Pebble Group after the latest results.

Check out our latest analysis for Pebble Group

Taking into account the latest results, the consensus forecast from Pebble Group's four analysts is for revenues of UK£127.0m in 2024. This reflects an okay 2.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 5.7% to UK£0.033 in the same period. In the lead-up to this report, the analysts had been modelling revenues of UK£126.4m and earnings per share (EPS) of UK£0.032 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With no major changes to earnings forecasts, the consensus price target fell 16% to UK£1.35, suggesting that the analysts might have previously been hoping for an earnings upgrade. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Pebble Group analyst has a price target of UK£1.65 per share, while the most pessimistic values it at UK£0.90. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Pebble Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 9.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Pebble Group.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Pebble Group's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Pebble Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Pebble Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Pebble Group going out to 2026, and you can see them 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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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.