Shareholders will be ecstatic, with their stake up 21% over the past week following GP Strategies Corporation's (NYSE:GPX) latest yearly results. It looks like a credible result overall - although revenues of US$473m were what the analysts expected, GP Strategies surprised by delivering a (statutory) profit of US$0.41 per share, an impressive 228% above what was forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for GP Strategies
Taking into account the latest results, the consensus forecast from GP Strategies' three analysts is for revenues of US$506.1m in 2021, which would reflect an okay 7.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 101% to US$0.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$506.1m and earnings per share (EPS) of US$0.81 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 40% to US$21.00, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on GP Strategies, with the most bullish analyst valuing it at US$17.25 and the most bearish at US$15.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 GP Strategies' rate of growth is expected to accelerate meaningfully, with the forecast 7.0% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 2.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% annually. GP Strategies is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.