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Elys Game Technology, Corp. (NASDAQ:ELYS) Analysts Just Slashed This Year's Revenue Estimates By 11%
The latest analyst coverage could presage a bad day for Elys Game Technology, Corp. (NASDAQ:ELYS), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the downgrade, the current consensus from Elys Game Technology's twin analysts is for revenues of US$49m in 2022 which - if met - would reflect a meaningful 16% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 55% to US$0.30. Yet before this consensus update, the analysts had been forecasting revenues of US$55m and losses of US$0.29 per share in 2022. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.
See our latest analysis for Elys Game Technology
The consensus price target fell 30% to US$3.50, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses. 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. Currently, the most bullish analyst values Elys Game Technology at US$5.00 per share, while the most bearish prices it at US$2.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Elys Game Technology's growth to accelerate, with the forecast 35% annualised growth to the end of 2022 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Elys Game Technology is expected to grow much faster than its industry.
The Bottom Line
While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Elys Game Technology's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Elys Game Technology going forwards.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Elys Game Technology going out as far as 2023, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Valuation is complex, but we're here to simplify it.
Discover if Elys BMG Group might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About OTCPK:ELYS
Elys BMG Group
Engages in the provision of business-to-consumer gaming services in the United States and Europe.
Low risk with weak fundamentals.
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