Motorpoint Group Plc (LON:MOTR) Released Earnings Last Week And Analysts Lifted Their Price Target To UK£1.70

It's shaping up to be a tough period for Motorpoint Group Plc (LON:MOTR), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at UK£1.1b, but statutory earnings fell catastrophically short, with a loss of UK£0.093 some 33% larger than what the analysts had predicted. 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 Motorpoint Group after the latest results.

See our latest analysis for Motorpoint Group

Following last week's earnings report, Motorpoint Group's twin analysts are forecasting 2025 revenues to be UK£1.08b, approximately in line with the last 12 months. Motorpoint Group is also expected to turn profitable, with statutory earnings of UK£0.029 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£1.14b and earnings per share (EPS) of UK£0.02 in 2025. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the massive increase in to the earnings per share numbers.

The average price target increased 21% to UK£1.70, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.5% by the end of 2025. This indicates a significant reduction from annual growth of 7.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.8% per year. It's pretty clear that Motorpoint Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Motorpoint Group's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 analyst estimates for Motorpoint Group going out as far as 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Motorpoint Group , and understanding this should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com