Earnings Update: New Zealand King Salmon Investments Limited (NZSE:NZK) Just Reported And Analysts Are Boosting Their Estimates
Last week saw the newest annual earnings release from New Zealand King Salmon Investments Limited (NZSE:NZK), an important milestone in the company's journey to build a stronger business. Results were overall in line with expectations, with the company breaking even at the statutory earnings per share (EPS) level on NZ$167m in revenue. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on New Zealand King Salmon Investments after the latest results.
View our latest analysis for New Zealand King Salmon Investments
Taking into account the latest results, the most recent consensus for New Zealand King Salmon Investments from two analysts is for revenues of NZ$196.7m in 2024 which, if met, would be a meaningful 18% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 501% to NZ$0.021. In the lead-up to this report, the analysts had been modelling revenues of NZ$182.5m and earnings per share (EPS) of NZ$0.015 in 2024. So it seems there's been a definite increase in optimism about New Zealand King Salmon Investments' future following the latest results, with a massive increase in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.7% to NZ$0.24per share.
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. It's clear from the latest estimates that New Zealand King Salmon Investments' rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that New Zealand King Salmon Investments is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards New Zealand King Salmon Investments following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on New Zealand King Salmon Investments. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
Before you take the next step you should know about the 3 warning signs for New Zealand King Salmon Investments (1 is a bit concerning!) that we have uncovered.
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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.
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