Analysts Are Updating Their DoubleDown Interactive Co., Ltd. (NASDAQ:DDI) Estimates After Its Yearly Results

Shareholders will be ecstatic, with their stake up 48% over the past week following DoubleDown Interactive Co., Ltd.'s (NASDAQ:DDI) latest yearly results. Results overall were respectable, with statutory earnings of US$2.03 per share roughly in line with what the analysts had forecast. Revenues of US$309m came in 2.2% ahead of analyst predictions. 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.

See our latest analysis for DoubleDown Interactive

Following the latest results, DoubleDown Interactive's three analysts are now forecasting revenues of US$326.8m in 2024. This would be a modest 5.8% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$2.05, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$322.0m and earnings per share (EPS) of US$1.99 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$14.83, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values DoubleDown Interactive at US$16.00 per share, while the most bearish prices it at US$13.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting DoubleDown Interactive is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that DoubleDown Interactive is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.8% annualised growth until the end of 2024. If achieved, this would be a much better result than the 9.8% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% annually for the foreseeable future. So although DoubleDown Interactive's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around DoubleDown Interactive's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on DoubleDown Interactive. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple DoubleDown Interactive analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the DoubleDown Interactive Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.