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

It's been a sad week for ZOO Digital Group plc (LON:ZOO), who've watched their investment drop 11% to UK£1.14 in the week since the company reported its yearly result. Revenues fell 2.7% short of expectations, at US$40m. Earnings correspondingly dipped, with ZOO Digital Group reporting a statutory loss of US$0.042 per share, whereas the analysts had previously modelled a profit in this period. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for ZOO Digital Group

Taking into account the latest results, the most recent consensus for ZOO Digital Group from twin analysts is for revenues of US$45.9m in 2022 which, if met, would be a decent 16% increase on its sales over the past 12 months. ZOO Digital Group is also expected to turn profitable, with statutory earnings of US$0.055 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$45.7m and earnings per share (EPS) of US$0.023 in 2022. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the considerable lift to earnings per share expectations following these results.

The consensus price target rose 6.0% to UK£1.59, suggesting that higher earnings estimates flow through to the stock's valuation as well.

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. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 16% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So although ZOO Digital Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ZOO Digital Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for ZOO Digital Group 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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