Freelancer Limited (ASX:FLN) Just Reported Earnings, And Analysts Cut Their Target Price
Shareholders might have noticed that Freelancer Limited (ASX:FLN) filed its full-year result this time last week. The early response was not positive, with shares down 5.4% to AU$0.17 in the past week. Revenues were AU$53m, with Freelancer reporting some 2.6% below analyst expectations. Following the result, the analyst has 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 analyst has changed their mind on Freelancer after the latest results.
View our latest analysis for Freelancer
Following the latest results, Freelancer's single analyst are now forecasting revenues of AU$57.3m in 2024. This would be a modest 7.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 689% to AU$0.0033. In the lead-up to this report, the analyst had been modelling revenues of AU$59.5m and earnings per share (EPS) of AU$0.0021 in 2024. Although the analyst has lowered their revenue forecasts, they've also made a great increase in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
The consensus price target fell 73% to AU$0.24, with the analyst signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Freelancer's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Freelancer is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.5% annualised growth until the end of 2024. If achieved, this would be a much better result than the 0.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 1.2% annually. Not only are Freelancer's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Freelancer following these results. They also downgraded Freelancer's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Freelancer's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Freelancer going out as far as 2025, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Freelancer that you need to be mindful of.
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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.
