Yahoo Finance Digital Media Solutions, Inc. (NYSE:DMS) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
As you might know, Digital Media Solutions, Inc. (NYSE:DMS) last week released its latest quarterly, and things did not turn out so great for shareholders. It was a pretty negative result overall, with revenues of US$91m missing analyst predictions by 7.7%. Worse, the business reported a statutory loss of US$0.18 per share, much larger than the analysts had forecast prior to the result. 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.
See our latest analysis for Digital Media Solutions
After the latest results, the consensus from Digital Media Solutions' three analysts is for revenues of US$390.8m in 2022, which would reflect an uneasy 8.3% decline in sales compared to the last year of performance. Losses are forecast to balloon 106% to US$0.54 per share. Before this latest report, the consensus had been expecting revenues of US$444.1m and US$0.26 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target fell 23% to US$4.00, implicitly signalling that lower earnings per share are a leading indicator for Digital Media Solutions' 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 Digital Media Solutions analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$3.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2022. This indicates a significant reduction from annual growth of 10% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.9% per year. It's pretty clear that Digital Media Solutions' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Digital Media Solutions' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Digital Media Solutions going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 3 warning signs for Digital Media Solutions (1 shouldn't be ignored!) that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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