HeadHunter Group PLC (NASDAQ:HHR) just released its latest third-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.2% to hit ₽2.3b. HeadHunter Group also reported a statutory profit of ₽10.60, which was an impressive 60% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from HeadHunter Group's twelve analysts is for revenues of ₽10.3b in 2021, which would reflect a sizeable 30% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 79% to ₽56.89. Before this earnings report, the analysts had been forecasting revenues of ₽10.2b and earnings per share (EPS) of ₽55.53 in 2021. So the consensus seems to have become somewhat more optimistic on HeadHunter Group's earnings potential following these results.
The consensus price target was unchanged at ₽1,778, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values HeadHunter Group at ₽32.29 per share, while the most bearish prices it at ₽13.39. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting HeadHunter Group 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. It's clear from the latest estimates that HeadHunter Group's rate of growth is expected to accelerate meaningfully, with the forecast 30% revenue growth noticeably faster than its historical growth of 21%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 7.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect HeadHunter Group to grow faster than the wider 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 HeadHunter Group following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at ₽1,778, with the latest estimates not enough to have an impact on their price targets.
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. We have forecasts for HeadHunter Group going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for HeadHunter Group you should be aware of.
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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