Evertz Technologies Limited Just Missed Earnings - But Analysts Have Updated Their Models
As you might know, Evertz Technologies Limited (TSE:ET) last week released its latest first-quarter, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CA$56m) coming in 26% below what they had expected. Statutory earnings per share of CA$0.01 fell 85% short. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Evertz Technologies
After the latest results, the consensus from Evertz Technologies' four analysts is for revenues of CA$344.5m in 2021, which would reflect a definite 12% decline in sales compared to the last year of performance. Statutory earnings per share are expected to nosedive 35% to CA$0.48 in the same period. Before this earnings report, the analysts had been forecasting revenues of CA$387.8m and earnings per share (EPS) of CA$0.60 in 2021. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a large cut to earnings per share numbers as well.
The analysts made no major changes to their price target of CA$14.13, suggesting the downgrades are not expected to have a long-term impact on Evertz Technologies' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Evertz Technologies, with the most bullish analyst valuing it at CA$15.00 and the most bearish at CA$13.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast revenue decline of 12%, a significant reduction from annual growth of 3.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Evertz Technologies is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Evertz Technologies. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at CA$14.13, with the latest estimates not enough to have an impact on their price targets.
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 Evertz Technologies analysts - going out to 2022, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Evertz Technologies that you should be aware of.
This article by Simply Wall St is general in nature. 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.
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