Earnings Miss: Xpediator Plc Missed EPS By 90% And Analysts Are Revising Their Forecasts

There's been a notable change in appetite for Xpediator Plc (LON:XPD) shares in the week since its full-year report, with the stock down 16% to UK£0.42. It looks like a pretty bad result, all things considered. Although revenues of UK£297m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 90% to hit UK£0.0029 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Xpediator

Following last week's earnings report, Xpediator's two analysts are forecasting 2022 revenues to be UK£301.8m, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 757% to UK£0.025. Before this earnings report, the analysts had been forecasting revenues of UK£283.9m and earnings per share (EPS) of UK£0.034 in 2022. So it's pretty clear the analysts have mixed opinions on Xpediator after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

The consensus price target fell 17% to UK£0.75, suggesting that the analysts are primarily focused on earnings as the driver of value for this business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Xpediator's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2022 being well below the historical 22% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Xpediator is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Xpediator. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Xpediator's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Xpediator. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 5 warning signs for Xpediator (1 is significant!) 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.