Earnings Miss: The Panoply Holdings plc Missed EPS And Analysts Are Revising Their Forecasts

Investors in The Panoply Holdings plc (LON:TPX) had a good week, as its shares rose 8.1% to close at UK£2.68 following the release of its yearly results. Things were not great overall, with a surprise (statutory) loss of UK£0.035 per share on revenues of UK£51m, even though the analysts had been expecting a profit. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Panoply Holdings

Following the latest results, Panoply Holdings' two analysts are now forecasting revenues of UK£70.3m in 2022. This would be a sizeable 38% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Panoply Holdings forecast to report a statutory profit of UK£0.036 per share. In the lead-up to this report, the analysts had been modelling revenues of UK£63.2m and earnings per share (EPS) of UK£0.066 in 2022. Although revenues are expected to increase meaningfully, the analysts have acknowledged the cost of growth, given the pretty serious reduction to EPS estimates following the latest report.

Curiously, the consensus price target rose 12% to UK£3.06. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.

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. It's pretty clear that there is an expectation that Panoply Holdings' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 38% growth on an annualised basis. This is compared to a historical growth rate of 82% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.2% per year. So it's pretty clear that, while Panoply Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Panoply Holdings. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Panoply Holdings. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Panoply Holdings going out as far as 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Panoply Holdings that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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