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It's been a good week for Iris Energy Limited (NASDAQ:IREN) shareholders, because the company has just released its latest full-year results, and the shares gained 7.7% to US$4.49. Revenues came in at US$59m, in line with expectations, while statutory losses per share were substantially higher than expected, at US$10.25 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Iris Energy
Taking into account the latest results, the most recent consensus for Iris Energy from five analysts is for revenues of US$133.7m in 2023 which, if met, would be a major 126% increase on its sales over the past 12 months. Per-share statutory losses are expected to explode, reaching US$0.36 per share. In the lead-up to this report, the analysts had been modelling revenues of US$204.6m and earnings per share (EPS) of US$0.84 in 2023. There looks to have been a major change in sentiment regarding Iris Energy's prospects following the latest results, with a large cut to revenues and the analysts now forecasting a loss instead of a profit.
The average price target fell 19% to US$9.93, implicitly signalling that lower earnings per share are a leading indicator for Iris Energy's valuation. 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 Iris Energy analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$6.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Iris Energy'shistorical trends, as the 126% annualised revenue growth to the end of 2023 is roughly in line with the 106% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that Iris Energy is forecast to grow substantially faster than its industry.