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Earnings Update: dotdigital Group Plc (LON:DOTD) Just Reported Its Full-Year Results And Analysts Are Updating Their Forecasts
It's been a pretty great week for dotdigital Group Plc (LON:DOTD) shareholders, with its shares surging 10% to UK£0.86 in the week since its latest yearly results. The result was positive overall - although revenues of UK£69m were in line with what the analysts predicted, dotdigital Group surprised by delivering a statutory profit of UK£0.041 per share, modestly greater than expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for dotdigital Group
Taking into account the latest results, the current consensus from dotdigital Group's six analysts is for revenues of UK£78.6m in 2024. This would reflect a notable 14% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to sink 10% to UK£0.037 in the same period. In the lead-up to this report, the analysts had been modelling revenues of UK£77.6m and earnings per share (EPS) of UK£0.035 in 2024. So the consensus seems to have become somewhat more optimistic on dotdigital Group's earnings potential following these results.
The consensus price target was unchanged at UK£1.23, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on dotdigital Group, with the most bullish analyst valuing it at UK£1.50 and the most bearish at UK£1.10 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the dotdigital Group's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of dotdigital Group'shistorical trends, as the 14% annualised revenue growth to the end of 2024 is roughly in line with the 13% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.1% per year. So it's pretty clear that dotdigital Group is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around dotdigital Group's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for dotdigital Group going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for dotdigital Group that you should be aware of.
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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.
About AIM:DOTD
dotdigital Group
Engages in the provision of intuitive software as a service (SaaS) and managed services to digital marketing professionals worldwide.
Very undervalued with flawless balance sheet and pays a dividend.
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