iomart Group plc Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders might have noticed that iomart Group plc (LON:IOM) filed its yearly result this time last week. The early response was not positive, with shares down 2.8% to UK£2.81 in the past week. Revenues of UK£112m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at UK£0.091, missing estimates by 7.1%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for iomart Group

Taking into account the latest results, the most recent consensus for iomart Group from five analysts is for revenues of UK£114.7m in 2022 which, if met, would be an okay 2.5% increase on its sales over the past 12 months. Statutory earnings per share are predicted to increase 9.7% to UK£0.10. Before this earnings report, the analysts had been forecasting revenues of UK£115.4m and earnings per share (EPS) of UK£0.11 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£3.68, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 iomart Group, with the most bullish analyst valuing it at UK£4.50 and the most bearish at UK£2.25 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would highlight that iomart Group's revenue growth is expected to slow, with the forecast 2.5% annualised growth rate until the end of 2022 being well below the historical 7.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than iomart Group.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for iomart Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at UK£3.68, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple iomart Group analysts - going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for iomart Group that you need to take into consideration.

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