Microlise Group plc Just Missed Earnings; Here's What Analysts Are Forecasting Now

It's been a good week for Microlise Group plc (LON:SAAS) shareholders, because the company has just released its latest full-year results, and the shares gained 8.2% to UK£1.13. It was a pretty negative result overall, with revenues of UK£79m missing analyst predictions by 2.7%. Worse, the business reported a statutory loss of UK£0.018 per share, a substantial decline on analyst expectations of a profit. 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 Microlise Group after the latest results.

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Following the latest results, Microlise Group's four analysts are now forecasting revenues of UK£91.0m in 2025. This would be a meaningful 14% improvement in revenue compared to the last 12 months. Microlise Group is also expected to turn profitable, with statutory earnings of UK£0.025 per share. In the lead-up to this report, the analysts had been modelling revenues of UK£91.0m and earnings per share (EPS) of UK£0.032 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

Check out our latest analysis for Microlise Group

It might be a surprise to learn that the consensus price target fell 17% to UK£1.89, with the analysts clearly linking lower forecast earnings to the performance of the stock price. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Microlise Group at UK£2.10 per share, while the most bearish prices it at UK£1.57. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Microlise Group's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 11% p.a. over the past three 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 Microlise Group 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 Microlise Group. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Microlise Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Microlise Group going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Microlise Group that you should be aware of.

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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.