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The analysts covering W.A.G payment solutions plc (LON:WPS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the latest downgrade, the current consensus, from the seven analysts covering W.A.G payment solutions, is for revenues of €1.3b in 2024, which would reflect a disturbing 41% reduction in W.A.G payment solutions' sales over the past 12 months. Before the latest update, the analysts were foreseeing €2.3b of revenue in 2024. The consensus view seems to have become more pessimistic on W.A.G payment solutions, noting the pretty serious reduction to revenue estimates in this update.
View our latest analysis for W.A.G payment solutions
We'd point out that there was no major changes to their price target of €1.43, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on W.A.G payment solutions, with the most bullish analyst valuing it at €1.62 and the most bearish at €1.01 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await W.A.G payment solutions shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 65% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last three years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 15% per year. The forecasts do look bearish for W.A.G payment solutions, since they're expecting it to shrink faster than the industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on W.A.G payment solutions after today.
Need some more information? At least one of W.A.G payment solutions' seven analysts has provided estimates out to 2026, which can be seen for free on our platform here.