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Shareholders will be ecstatic, with their stake up 47% over the past week following Ebix, Inc.'s (NASDAQ:EBIX) latest third-quarter results. Sales of US$154m came in a notable 29% ahead of expectations, while statutory earnings of US$0.80 were in line with what the analysts had been forecasting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Ebix's dual analysts are now forecasting revenues of US$694.6m 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 36% to US$4.23. Before this earnings report, the analysts had been forecasting revenues of US$611.4m and earnings per share (EPS) of US$4.25 in 2021. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$54.50, implying that the uplift in sales is not expected to greatly contribute to Ebix's valuation in the near term.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ebix's past performance and to peers in the same industry. It's clear from the latest estimates that Ebix's rate of growth is expected to accelerate meaningfully, with the forecast 26% revenue growth noticeably faster than its historical growth of 18%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ebix is expected to grow much faster than its industry.
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. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$54.50, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Ebix going out as far as 2022, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Ebix (including 1 which can't be ignored) .
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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