Getty Images Holdings, Inc. Just Missed EPS By 74%: Here's What Analysts Think Will Happen Next

Investors in Getty Images Holdings, Inc. (NYSE:GETY) had a good week, as its shares rose 3.5% to close at US$6.14 following the release of its quarterly results. Sales of US$236m surpassed estimates by 3.1%, although statutory earnings per share missed badly, coming in 74% below expectations at US$0.01 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Getty Images Holdings

Taking into account the latest results, the most recent consensus for Getty Images Holdings from eight analysts is for revenues of US$954.0m in 2023 which, if met, would be a modest 2.5% increase on its sales over the past 12 months. Earnings are expected to improve, with Getty Images Holdings forecast to report a statutory profit of US$0.14 per share. In the lead-up to this report, the analysts had been modelling revenues of US$950.2m and earnings per share (EPS) of US$0.20 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The consensus price target held steady at US$6.81, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Getty Images Holdings, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$5.50 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.

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. For example, we noticed that Getty Images Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.3% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 0.04% a year over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.8% annually for the foreseeable future. Although Getty Images Holdings' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Getty Images Holdings. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues 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 Getty Images Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Getty Images Holdings going out to 2025, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Getty Images Holdings (1 can't be ignored) you should be aware of.

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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.