Earnings Update: Helios Towers plc (LON:HTWS) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

Helios Towers plc (LON:HTWS) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The result was fairly weak overall, with revenues of US$195m being 2.2% less than what the analysts had been modelling. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Helios Towers

Taking into account the latest results, the consensus forecast from Helios Towers' five analysts is for revenues of US$798.1m in 2024. This reflects a credible 4.9% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Helios Towers forecast to report a statutory profit of US$0.055 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$802.6m and earnings per share (EPS) of US$0.057 in 2024. 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 minor downgrade to their earnings per share forecasts.

The consensus price target held steady at UK£1.84, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Helios Towers analyst has a price target of UK£2.63 per share, while the most pessimistic values it at UK£1.15. 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.

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 pretty clear that there is an expectation that Helios Towers' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.9% per year. So it's pretty clear that, while Helios Towers' 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 Helios Towers. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at UK£1.84, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Helios Towers. Long-term earnings power is much more important than next year's profits. We have forecasts for Helios Towers going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Helios Towers that you need to take into consideration.

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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.