Yahoo Finance Earnings Miss: GDI Integrated Facility Services Inc. Missed EPS By 36% And Analysts Are Revising Their Forecasts
GDI Integrated Facility Services Inc. (TSE:GDI) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to CA$43.49 in the week after its latest first-quarter results. It looks like a pretty bad result, all things considered. Although revenues of CA$495m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 36% to hit CA$0.30 per share. 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.
View our latest analysis for GDI Integrated Facility Services
Taking into account the latest results, the consensus forecast from GDI Integrated Facility Services' seven analysts is for revenues of CA$2.05b in 2022, which would reflect a sizeable 20% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to expand 11% to CA$1.78. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$2.04b and earnings per share (EPS) of CA$2.10 in 2022. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
It might be a surprise to learn that the consensus price target fell 6.8% to CA$63.64, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. Currently, the most bullish analyst values GDI Integrated Facility Services at CA$72.50 per share, while the most bearish prices it at CA$50.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's clear from the latest estimates that GDI Integrated Facility Services' rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GDI Integrated Facility Services to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of GDI Integrated Facility Services' future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for GDI Integrated Facility Services going out to 2024, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for GDI Integrated Facility Services that we have uncovered.
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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.
