ATN International, Inc. (NASDAQ:ATNI) just released its latest quarterly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$112m, some 2.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.17, 173% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from ATN International's four analysts is for revenues of US$508.7m in 2021, which would reflect a solid 15% improvement in sales compared to the last 12 months. ATN International is also expected to turn profitable, with statutory earnings of US$0.47 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$485.5m and losses of US$0.07 per share in 2021. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the slight bump in revenue expectations.
As a result, it might be a surprise to see thatthe analysts have cut their price target 5.4% to US$65.25, which could suggest the forecast improvement in performance is not expected to last. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on ATN International, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$52.00 per share. 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 ATN International's past performance and to peers in the same industry. The analysts are definitely expecting ATN International's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 2.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that ATN International is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting ATN International to become profitable next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple ATN International analysts - going out to 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - ATN International has 2 warning signs we think you should be aware of.
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