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Earnings Beat: GEE Group, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Simply Wall St
·3 min read

As you might know, GEE Group, Inc. (NYSEMKT:JOB) recently reported its annual numbers. GEE Group beat expectations by 3.5% with revenues of US$130m. It also surprised on the earnings front, with an unexpected statutory profit of US$0.67 per share a nice improvement on the losses that the analyst forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

Check out our latest analysis for GEE Group

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, GEE Group's one analyst currently expect revenues in 2021 to be US$129.5m, approximately in line with the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analyst forecasting statutory losses of -US$0.76 per share in 2021. Before this earnings announcement, the analyst had been modelling revenues of US$115.8m and losses of US$0.44 per share in 2021. Ergo, there's been a clear change in sentiment, with the analyst lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.

Spiting the revenue upgrading, the average price target fell 30% to US$1.75, clearly signalling that higher forecast losses are a valuation concern.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GEE Group's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.3%, a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.5% next year. It's pretty clear that GEE Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for GEE Group (of which 2 are significant!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.