Some InPlay Oil Corp. (TSE:IPO) Analysts Just Made A Major Cut To Next Year's Estimates
Market forces rained on the parade of InPlay Oil Corp. (TSE:IPO) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
After the downgrade, the three analysts covering InPlay Oil are now predicting revenues of CA$190m in 2024. If met, this would reflect a notable 16% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to tumble 30% to CA$0.32 in the same period. Prior to this update, the analysts had been forecasting revenues of CA$211m and earnings per share (EPS) of CA$0.41 in 2024. Indeed, we can see that the analysts are a lot more bearish about InPlay Oil's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for InPlay Oil
It'll come as no surprise then, to learn that the analysts have cut their price target 8.9% to CA$4.39.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the InPlay Oil's past performance and to peers in the same industry. We would highlight that InPlay Oil's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2024 being well below the historical 28% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.6% per year. Even after the forecast slowdown in growth, it seems obvious that InPlay Oil is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of InPlay Oil.
That said, the analysts might have good reason to be negative on InPlay Oil, given dilutive stock issuance over the past year. Learn more, and discover the 3 other warning signs we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
