GEE Group, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

By
Simply Wall St
Published
January 01, 2021
AMEX:JOB

GEE Group, Inc. (NYSEMKT:JOB) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasts think of the company following this report. It was overall a positive result, with revenues beating expectations by 3.5% to hit US$130m. GEE Group also reported a statutory profit of US$0.67, which was a nice improvement from the loss that the analyst were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

Check out our latest analysis for GEE Group

earnings-and-revenue-growth
AMEX:JOB Earnings and Revenue Growth January 1st 2021

Following last week's earnings report, GEE Group's single analyst are forecasting 2021 revenues to be US$129.5m, approximately in line with the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analyst forecasting statutory losses of -US$0.76 per share in 2021. Before this latest report, the consensus had been expecting revenues of US$115.8m and US$0.44 per share in losses. Ergo, there's been a clear change in sentiment, with the analyst lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.

It will come as no surprise that expanding losses caused the consensus price target to fall 30% to US$1.75with the analyst implicitly ranking ongoing losses as a greater concern than growing revenues.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GEE Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 0.3% revenue decline a notable change from historical growth of 17% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - GEE Group is expected to lag the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at GEE Group. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of GEE Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for GEE Group (of which 2 are potentially serious!) you should know about.

Promoted
If you decide to trade GEE Group, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.


This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.