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.
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.
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