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The half-year results for Argo Blockchain plc (LON:ARB) were released last week, making it a good time to revisit its performance. Revenues hit UK£31m, beating expectations by a remarkable 25%. Statutory earnings per share (EPS) came up short, with EPS of UK£0.018 missing forecasts by 10%. 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.
Check out our latest analysis for Argo Blockchain
Taking into account the latest results, the most recent consensus for Argo Blockchain from two analysts is for revenues of UK£64.7m in 2021 which, if met, would be a huge 66% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 132% to UK£0.052. In the lead-up to this report, the analysts had been modelling revenues of UK£58.3m and earnings per share (EPS) of UK£0.067 in 2021. Although sales sentiment has improved substantially, the analysts have made a pretty serious reduction to per-share earnings estimates, suggesting that the growth is not without cost.
The consensus price target was unchanged at UK£2.45, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Argo Blockchain's rate of growth is expected to accelerate meaningfully, with the forecast 176% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 132% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Argo Blockchain to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at UK£2.45, with the latest estimates not enough to have an impact on their price targets.