Datalex plc (ISE:DLE) Just Reported Earnings, And Analysts Cut Their Target Price

Datalex plc (ISE:DLE) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of US$24m missing analyst predictions by 4.7%. Worse, the business reported a statutory loss of US$0.087 per share, much larger than the analysts had forecast prior to the result. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Datalex

Taking into account the latest results, the current consensus from Datalex's twin analysts is for revenues of US$27.2m in 2023, which would reflect a meaningful 16% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 55% to US$0.039. Before this earnings announcement, the analysts had been modelling revenues of US$27.4m and losses of US$0.047 per share in 2023. Although the revenue estimates have not really changed Datalex'sfuture looks a little different to the past, with a notable improvement in the loss per share forecasts in particular.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 25% to €0.36. It looks likethe analysts have become less optimistic about the overall 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. One thing stands out from these estimates, which is that Datalex is forecast to grow faster in the future than it has in the past, with revenues expected to display 16% annualised growth until the end of 2023. If achieved, this would be a much better result than the 22% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 8.9% per year. Not only are Datalex's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Datalex going out as far as 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 5 warning signs for Datalex you should be aware of, and 2 of them are a bit unpleasant.

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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.