Earnings Beat: IBEX Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for IBEX Limited (NASDAQ:IBEX) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.4% to US$19.69. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$132m, statutory earnings beat expectations by a notable 103%, coming in at US$0.61 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for IBEX

Taking into account the latest results, the current consensus from IBEX's five analysts is for revenues of US$567.4m in 2024, which would reflect a solid 8.6% increase on its sales over the past 12 months. Statutory earnings per share are predicted to shoot up 50% to US$1.87. Before this earnings report, the analysts had been forecasting revenues of US$601.0m and earnings per share (EPS) of US$1.87 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was reduced 14% to US$26.80, with the lower revenue forecasts indicating negative sentiment towards IBEX, even though earnings forecasts were unchanged. 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. There are some variant perceptions on IBEX, with the most bullish analyst valuing it at US$32.00 and the most bearish at US$23.00 per share. 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.

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. It's pretty clear that there is an expectation that IBEX's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.8% growth on an annualised basis. This is compared to a historical growth rate of 9.1% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.5% annually. So it's pretty clear that, while IBEX's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Even so, earnings are more important to the intrinsic value of the business. 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.

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 IBEX analysts - going out to 2025, 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.