IBEX Limited Just Missed EPS By 31%: Here's What Analysts Think Will Happen Next

There's been a notable change in appetite for IBEX Limited (NASDAQ:IBEX) shares in the week since its second-quarter report, with the stock down 11% to US$15.79. Statutory earnings per share fell badly short of expectations, coming in at US$0.34, some 31% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$133m. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for IBEX

Following last week's earnings report, IBEX's five analysts are forecasting 2024 revenues to be US$507.3m, approximately in line with the last 12 months. Per-share earnings are expected to rise 9.2% to US$1.82. Before this earnings report, the analysts had been forecasting revenues of US$528.3m and earnings per share (EPS) of US$1.97 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of US$19.40, suggesting the downgrades are not expected to have a long-term impact on IBEX'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. Currently, the most bullish analyst values IBEX at US$22.00 per share, while the most bearish prices it at US$17.00. 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 revenue is expected to slow, with a forecast annualised decline of 2.3% by the end of 2024. This indicates a significant reduction from annual growth of 7.5% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - IBEX is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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. At Simply Wall St, we have a full range of analyst estimates for IBEX going out to 2026, 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.