Here's What Analysts Are Forecasting For Gentrack Group Limited (NZSE:GTK) After Its Annual Results

It's been a good week for Gentrack Group Limited (NZSE:GTK) shareholders, because the company has just released its latest yearly results, and the shares gained 6.4% to NZ$1.50. Revenues of NZ$101m beat expectations by a respectable 3.4%, although statutory losses per share increased. Gentrack Group lost NZ$0.32, which was 213% more than what the analysts had included in their models. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Gentrack Group

Taking into account the latest results, the current consensus, from the three analysts covering Gentrack Group, is for revenues of NZ$96.1m in 2021, which would reflect a perceptible 4.4% reduction in Gentrack Group's sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 83% to NZ$0.055. Yet prior to the latest earnings, the analysts had been forecasting revenues of NZ$94.9m and losses of NZ$0.022 per share in 2021. While this year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target held steady at NZ$1.55, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Gentrack Group, with the most bullish analyst valuing it at NZ$1.75 and the most bearish at NZ$1.40 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 4.4%, a significant reduction from annual growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% next year. It's pretty clear that Gentrack Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Gentrack Group's revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. We have estimates - from multiple Gentrack Group analysts - going out to 2023, and you can see them free on our platform here.

You still need to take note of risks, for example - Gentrack Group has 1 warning sign we think you should be aware of.

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