Analysts Have Made A Financial Statement On Serko Limited's (NZSE:SKO) Half-Yearly Report

Shareholders might have noticed that Serko Limited (NZSE:SKO) filed its interim result this time last week. The early response was not positive, with shares down 6.1% to NZ$2.48 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 2.1%to hit NZ$62m. 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.

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Following the latest results, Serko's seven analysts are now forecasting revenues of NZ$120.2m in 2026. This would be a meaningful 12% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 59% to NZ$0.087. Before this latest report, the consensus had been expecting revenues of NZ$119.5m and NZ$0.10 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a cut to losses per share in particular.

Check out our latest analysis for Serko

There's been no major changes to the consensus price target of NZ$3.69, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Serko analyst has a price target of NZ$4.55 per share, while the most pessimistic values it at NZ$2.71. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Serko's revenue growth is expected to slow, with the forecast 25% annualised growth rate until the end of 2026 being well below the historical 41% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% per year. So it's pretty clear that, while Serko's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Serko. 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 Serko going out to 2028, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.