Earnings Miss: IDOX plc Missed EPS By 35% And Analysts Are Revising Their Forecasts

It's been a good week for IDOX plc (LON:IDOX) shareholders, because the company has just released its latest full-year results, and the shares gained 5.4% to UK£0.66. It looks like a pretty bad result, all things considered. Although revenues of UK£73m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 35% to hit UK£0.012 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for IDOX

Taking into account the latest results, the current consensus from IDOX's four analysts is for revenues of UK£88.8m in 2024. This would reflect a major 21% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 27% to UK£0.016. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£85.9m and earnings per share (EPS) of UK£0.022 in 2024. So it's pretty clear the analysts have mixed opinions on IDOX after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

The analysts also upgraded IDOX's price target 12% to UK£0.83, implying that the higher revenue expected to generate enough value to offset the forecast decline in earnings. 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. The most optimistic IDOX analyst has a price target of UK£0.85 per share, while the most pessimistic values it at UK£0.80. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting IDOX's growth to accelerate, with the forecast 21% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that IDOX is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for IDOX. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on IDOX. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple IDOX analysts - going out to 2026, and you can see them free on our platform here.

You can also see whether IDOX is carrying too much debt, and whether its balance sheet is healthy, for free 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.