Earnings Beat: Accel Entertainment, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
It's been a pretty great week for Accel Entertainment, Inc. (NYSE:ACEL) shareholders, with its shares surging 10% to US$11.49 in the week since its latest full-year results. Revenues were US$1.2b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.53 were also better than expected, beating analyst predictions by 14%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Accel Entertainment
Following last week's earnings report, Accel Entertainment's four analysts are forecasting 2024 revenues to be US$1.19b, approximately in line with the last 12 months. Per-share earnings are expected to increase 7.2% to US$0.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.18b and earnings per share (EPS) of US$0.59 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$14.00, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Accel Entertainment at US$15.00 per share, while the most bearish prices it at US$13.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Accel Entertainment is an easy business to forecast or the the analysts are all using similar assumptions.
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. We would highlight that Accel Entertainment's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2024 being well below the historical 29% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Accel Entertainment is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Accel Entertainment. 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 Accel Entertainment going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Accel Entertainment 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.
