The investors in UP Fintech Holding Limited's (NASDAQ:TIGR) will be rubbing their hands together with glee today, after the share price leapt 99% to US$5.57 in the week following its annual results. Statutory earnings per share fell badly short of expectations, coming in at US$0.094, some 45% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$246m. 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.
Taking into account the latest results, the most recent consensus for UP Fintech Holding from six analysts is for revenues of US$334.7m in 2022 which, if met, would be a sizeable 36% increase on its sales over the past 12 months. Per-share earnings are expected to leap 250% to US$0.34. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$332.4m and earnings per share (EPS) of US$0.31 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$12.04, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 UP Fintech Holding at US$38.50 per share, while the most bearish prices it at US$5.40. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. It's pretty clear that there is an expectation that UP Fintech Holding's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 36% growth on an annualised basis. This is compared to a historical growth rate of 54% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.7% per year. So it's pretty clear that, while UP Fintech Holding's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around UP Fintech Holding's earnings potential 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$12.04, 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 UP Fintech Holding going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with UP Fintech Holding .
What are the risks and opportunities for UP Fintech Holding?
Earnings are forecast to grow 29.14% per year
Earnings grew by 207.2% over the past year
Volatile share price over the past 3 months
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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.