As you might know, Gaming Innovation Group Inc. (OB:GIG) recently reported its quarterly numbers. It was a credible result overall, with revenues of €19m and statutory earnings per share of €0.01 both in line with analyst estimates, showing that Gaming Innovation Group is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Gaming Innovation Group's three analysts currently expect revenues in 2022 to be €89.2m, approximately in line with the last 12 months. Gaming Innovation Group is also expected to turn profitable, with statutory earnings of €0.078 per share. Before this earnings report, the analysts had been forecasting revenues of €87.9m and earnings per share (EPS) of €0.075 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The average the analysts price target fell 8.0% to kr29.22, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Gaming Innovation Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 2.6% annualised growth until the end of 2022. If achieved, this would be a much better result than the 10% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 12% annually for the foreseeable future. So although Gaming Innovation Group's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Gaming Innovation Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Gaming Innovation Group's revenues are expected to perform worse 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 in mind, we wouldn't be too quick to come to a conclusion on Gaming Innovation Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Gaming Innovation Group going out to 2024, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Gaming Innovation Group , and understanding them should be part of your investment process.
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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.