Last week, you might have seen that Hemisphere Media Group, Inc. (NASDAQ:HMTV) released its full-year result to the market. The early response was not positive, with shares down 8.8% to US$11.52 in the past week. It was an okay report, and revenues came in at US$149m, approximately in line with analyst estimates leading up to the results announcement. 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether analysts have changed their mind on Hemisphere Media Group after the latest results.
Taking into account the latest results, the current consensus from Hemisphere Media Group’s twin analysts is for revenues of US$156.0m in 2020, which would reflect a reasonable 4.4% increase on its sales over the past 12 months. Earnings are expected to improve, with Hemisphere Media Group forecast to report a statutory profit of US$0.10 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$166.2m and earnings per share (EPS) of US$0.23 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share forecasts.
The consensus price target fell 6.1% to US$15.50, with the weaker earnings outlook clearly leading analyst valuation estimates.
In addition, we can look to Hemisphere Media Group’s past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. Next year brings more of the same, according to analysts, with revenue forecast to grow 4.4%, in line with its 4.2% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the are forecast to see their revenues grow 3.9% per year. So although Hemisphere Media Group is expected to maintain its revenue growth rate, it’s only growing at about the rate of the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Hemisphere Media Group going out as far as 2023, and you can see them free on our platform here.
You can also see whether Hemisphere Media Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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