Stock Analysis

Earnings Miss: Townsquare Media, Inc. Missed EPS And Analysts Are Revising Their Forecasts

  •  Updated
NYSE:TSQ
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It's been a pretty great week for Townsquare Media, Inc. (NYSE:TSQ) shareholders, with its shares surging 15% to US$12.00 in the week since its latest yearly results. Revenues came in at US$371m, in line with estimates, while Townsquare Media reported a statutory loss of US$4.46 per share, well short of prior analyst forecasts for a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Townsquare Media

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NYSE:TSQ Earnings and Revenue Growth March 19th 2021

After the latest results, the three analysts covering Townsquare Media are now predicting revenues of US$393.4m in 2021. If met, this would reflect a modest 5.9% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Townsquare Media forecast to report a statutory profit of US$0.60 per share. Before this earnings report, the analysts had been forecasting revenues of US$397.8m and earnings per share (EPS) of US$0.25 in 2021. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 33% to US$17.67. 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 Townsquare Media at US$24.00 per share, while the most bearish prices it at US$14.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Townsquare Media's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Townsquare Media is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.9% annualised growth until the end of 2021. If achieved, this would be a much better result than the 4.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.6% annually. So it looks like Townsquare Media is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Townsquare Media's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Townsquare Media going out to 2023, and you can see them free on our platform here..

You still need to take note of risks, for example - Townsquare Media has 1 warning sign we think you should be aware of.

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What are the risks and opportunities for Townsquare Media?

Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses.

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Rewards

  • Trading at 73.8% below our estimate of its fair value

  • Earnings are forecast to grow 38.65% per year

Risks

  • Interest payments are not well covered by earnings

  • Shareholders have been diluted in the past year

  • Profit margins (2.3%) are lower than last year (4.7%)

  • Large one-off items impacting financial results

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