Argo Blockchain plc Just Missed EPS By 10%: Here's What Analysts Think Will Happen Next

Last week saw the newest half-year earnings release from Argo Blockchain plc (LON:ARB), an important milestone in the company's journey to build a stronger business. Results were mixed, with sales coming in 25% at UK£31m, yet statutory earnings came up 10% short, at UK£0.018 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Argo Blockchain

After the latest results, the two analysts covering Argo Blockchain are now predicting revenues of UK£64.7m in 2021. If met, this would reflect a sizeable 66% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 132% to UK£0.052. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£58.3m and earnings per share (EPS) of UK£0.067 in 2021. Although revenues are expected to increase meaningfully, the analysts have acknowledged the cost of growth, given the large cut to EPS estimates following the latest report.

There's been no major changes to the price target of UK£2.45, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation.

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. The analysts are definitely expecting Argo Blockchain's growth to accelerate, with the forecast 176% annualised growth to the end of 2021 ranking favourably alongside historical growth of 132% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Argo Blockchain 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 Argo Blockchain. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at UK£2.45, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

Before you take the next step you should know about the 3 warning signs for Argo Blockchain (1 is a bit concerning!) that we have uncovered.

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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.
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