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Investors in Microlise Group plc (LON:SAAS) had a good week, as its shares rose 8.2% to close at UK£1.13 following the release of its full-year results. Revenues fell 2.7% short of expectations, at UK£79m. Earnings correspondingly dipped, with Microlise Group reporting a statutory loss of UK£0.018 per share, whereas the analysts had previously modelled a profit in this period. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Microlise Group's four analysts are now forecasting revenues of UK£91.0m in 2025. This would be a decent 14% improvement in revenue compared to the last 12 months. Microlise Group is also expected to turn profitable, with statutory earnings of UK£0.025 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£91.0m and earnings per share (EPS) of UK£0.032 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
See our latest analysis for Microlise Group
The average price target fell 17% to UK£1.89, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values Microlise Group at UK£2.10 per share, while the most bearish prices it at UK£1.57. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Microlise Group's growth to accelerate, with the forecast 14% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Microlise Group is expected to grow much faster than its industry.