GAN Limited (NASDAQ:GAN) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

GAN Limited (NASDAQ:GAN) shareholders are probably feeling a little disappointed, since its shares fell 4.6% to US$15.21 in the week after its latest first-quarter results. Results overall weren't great; even though revenues of US$28m beat expectations by 12%, statutory losses ballooned to US$0.11 per share, substantially worse than the analysts had expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for GAN

Taking into account the latest results, the current consensus from GAN's four analysts is for revenues of US$102.2m in 2021, which would reflect a sizeable 85% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 97% to US$0.024. Before this latest report, the consensus had been expecting revenues of US$102.2m and US$0.024 per share in losses.

The consensus price target was unchanged at US$28.00, suggesting that the business - losses and all - is executing in line with estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on GAN, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$20.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GAN's past performance and to peers in the same industry. The analysts are definitely expecting GAN's growth to accelerate, with the forecast 127% annualised growth to the end of 2021 ranking favourably alongside historical growth of 36% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GAN to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$28.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for GAN going out to 2023, and you can see them free on our platform here.

You still need to take note of risks, for example - GAN has 2 warning signs we think you should be aware of.

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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.
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