YouGov plc Just Missed EPS By 26%: Here's What Analysts Think Will Happen Next

YouGov plc (LON:YOU) shareholders are probably feeling a little disappointed, since its shares fell 5.1% to UK£7.84 in the week after its latest full-year results. Results overall were not great, with earnings of UK£0.15 per share falling drastically short of analyst expectations. Meanwhile revenues hit UK£221m and were slightly better than forecasts. 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 YouGov after the latest results.

Check out our latest analysis for YouGov

Taking into account the latest results, the consensus forecast from YouGov's five analysts is for revenues of UK£261.5m in 2023, which would reflect a notable 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 95% to UK£0.30. Before this earnings report, the analysts had been forecasting revenues of UK£259.1m and earnings per share (EPS) of UK£0.30 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target fell 7.0% to UK£14.30, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. 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 YouGov, with the most bullish analyst valuing it at UK£16.40 and the most bearish at UK£12.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting YouGov's growth to accelerate, with the forecast 18% annualised growth to the end of 2023 ranking favourably alongside historical growth of 13% 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 6.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that YouGov is expected to grow much faster than its industry.

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, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on YouGov. Long-term earnings power is much more important than next year's profits. We have forecasts for YouGov going out to 2025, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.