Yahoo Finance Earnings Miss: Keywords Studios plc Missed EPS By 53% And Analysts Are Revising Their Forecasts
It's been a good week for Keywords Studios plc (LON:KWS) shareholders, because the company has just released its latest yearly results, and the shares gained 7.2% to UK£14.26. Statutory earnings per share fell badly short of expectations, coming in at €0.25, some 53% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €780m. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Keywords Studios
Taking into account the latest results, the current consensus from Keywords Studios' eleven analysts is for revenues of €900.6m in 2024. This would reflect a solid 15% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 147% to €0.62. Before this earnings report, the analysts had been forecasting revenues of €903.9m and earnings per share (EPS) of €0.69 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at UK£22.15, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Keywords Studios analyst has a price target of UK£32.97 per share, while the most pessimistic values it at UK£13.67. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Keywords Studios' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.9% annually. So it's pretty clear that, while Keywords Studios' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Keywords Studios going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Keywords Studios .
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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.
