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Shareholders might have noticed that Propel Holdings Inc. (TSE:PRL) filed its quarterly result this time last week. The early response was not positive, with shares down 6.6% to CA$7.59 in the past week. Propel Holdings reported US$51m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.11 beat expectations, being 4.8% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the three analysts covering Propel Holdings are now predicting revenues of US$232.9m in 2022. If met, this would reflect a major 80% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 175% to US$0.53. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$235.6m and earnings per share (EPS) of US$0.56 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at CA$14.83, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Propel Holdings analyst has a price target of CA$17.00 per share, while the most pessimistic values it at CA$13.50. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. The analysts are definitely expecting Propel Holdings' growth to accelerate, with the forecast 118% annualised growth to the end of 2022 ranking favourably alongside historical growth of 76% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 32% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Propel Holdings is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Propel Holdings. 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 Propel Holdings going out to 2023, and you can see them free on our platform here..
You still need to take note of risks, for example - Propel Holdings has 4 warning signs (and 1 which is concerning) we think you should know about.
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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.