ANGI Homeservices Inc. (NASDAQ:ANGI) shareholders are probably feeling a little disappointed, since its shares fell 5.6% to US$10.01 in the week after its latest quarterly results. It looks like a credible result overall - although revenues of US$390m were what the analysts expected, ANGI Homeservices surprised by delivering a (statutory) profit of US$0.01 per share, an impressive 188% above what was forecast. 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.
Following the latest results, ANGI Homeservices' 16 analysts are now forecasting revenues of US$1.76b in 2021. This would be a substantial 26% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 103% to US$0.088. Before this earnings report, the analysts had been forecasting revenues of US$1.77b and earnings per share (EPS) of US$0.093 in 2021. 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 small dip in their earnings per share forecasts.
The consensus price target held steady at US$15.70, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values ANGI Homeservices at US$19.00 per share, while the most bearish prices it at US$12.00. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to the analysts, with revenue forecast to grow 26%, in line with its 25% annual growth over the past three years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% next year. So although ANGI Homeservices is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ANGI Homeservices. 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 held steady at US$15.70, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on ANGI Homeservices. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ANGI Homeservices going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - ANGI Homeservices has 4 warning signs we think you should be aware of.
This article by Simply Wall St is general in nature. 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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