Yahoo Finance Sangoma Technologies Corporation (TSE:STC) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year
The investors in Sangoma Technologies Corporation's (TSE:STC) will be rubbing their hands together with glee today, after the share price leapt 21% to CA$4.58 in the week following its second-quarter results. Revenues were in line with expectations, at US$62m, while statutory losses ballooned to US$0.10 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Sangoma Technologies
Following last week's earnings report, Sangoma Technologies' five analysts are forecasting 2024 revenues to be US$248.4m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 74% to US$0.24. Before this earnings announcement, the analysts had been modelling revenues of US$251.1m and losses of US$0.27 per share in 2024. Although the revenue estimates have not really changed Sangoma Technologies'future looks a little different to the past, with a notable improvement in the loss per share forecasts in particular.
There's been no major changes to the consensus price target of CA$7.78, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's 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. There are some variant perceptions on Sangoma Technologies, with the most bullish analyst valuing it at CA$9.99 and the most bearish at CA$6.49 per share. 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.
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. We would highlight that revenue is expected to reverse, with a forecast 2.6% annualised decline to the end of 2024. That is a notable change from historical growth of 29% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.5% annually for the foreseeable future. It's pretty clear that Sangoma Technologies' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sangoma Technologies' revenue is expected to perform worse 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Sangoma Technologies going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Sangoma Technologies .
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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.
