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There's been a notable change in appetite for Alphawave IP Group plc (LON:AWE) shares in the week since its interim report, with the stock down 13% to UK£1.14. Revenues fell badly short of expectations, with revenue of US$91m, missing analyst estimates by 35%. 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 Alphawave IP Group
Taking into account the latest results, the current consensus from Alphawave IP Group's three analysts is for revenues of US$341.0m in 2024. This would reflect a substantial 51% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 60% to US$0.045. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$352.7m and losses of US$0.045 per share in 2024.
The consensus price target was broadly unchanged at UK£1.75, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast revenue next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Alphawave IP Group analyst has a price target of UK£1.89 per share, while the most pessimistic values it at UK£1.54. This is a very narrow spread of estimates, implying either that Alphawave IP Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Alphawave IP Group's rate of growth is expected to accelerate meaningfully, with the forecast 129% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 47% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 28% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Alphawave IP Group to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster 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.