Results: Spok Holdings, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Spok Holdings, Inc. (NASDAQ:SPOK) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 5.1% to hit US$35m. Spok Holdings also reported a statutory profit of US$0.22, which was an impressive 100% above what the analyst had forecast. Following the result, the analyst has 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 thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Spok Holdings

Following last week's earnings report, Spok Holdings' single analyst are forecasting 2024 revenues to be US$139.8m, approximately in line with the last 12 months. Statutory earnings per share are expected to dive 60% to US$0.74 in the same period. In the lead-up to this report, the analyst had been modelling revenues of US$138.0m and earnings per share (EPS) of US$0.68 in 2024. The analyst seem 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$15.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. From these estimates it looks as though the analyst expects the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 5.2% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.5% annually. Although Spok Holdings' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Spok Holdings' 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. The consensus price target held steady at US$15.50, with the latest estimates not enough to have an impact on their price target.

With that in mind, we wouldn't be too quick to come to a conclusion on Spok Holdings. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Spok Holdings going out as far as 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 2 warning signs for Spok Holdings (1 is significant) 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.