STV Group plc Just Recorded A 34% EPS Beat: Here's What Analysts Are Forecasting Next

STV Group plc (LON:STVG) 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 were UK£107m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at UK£0.17, an impressive 34% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for STV Group

After the latest results, the three analysts covering STV Group are now predicting revenues of UK£126.2m in 2021. If met, this would reflect a meaningful 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 50% to UK£0.27. In the lead-up to this report, the analysts had been modelling revenues of UK£122.7m and earnings per share (EPS) of UK£0.36 in 2021. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

There's been no major changes to the price target of UK£4.31, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic STV Group analyst has a price target of UK£4.50 per share, while the most pessimistic values it at UK£4.07. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the STV Group's past performance and to peers in the same industry. One thing stands out from these estimates, which is that STV Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 18% annualised growth until the end of 2021. If achieved, this would be a much better result than the 0.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.5% per year. Not only are STV Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for STV Group. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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 STV Group going out to 2023, and you can see them free on our platform here.

Plus, you should also learn about the 5 warning signs we've spotted with STV Group (including 1 which makes us a bit uncomfortable) .

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