Magic Software Enterprises Ltd. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Magic Software Enterprises Ltd. (NASDAQ:MGIC) defied analyst predictions to release its yearly results, which were ahead of market expectations. The company beat expectations with revenues of US$535m arriving 2.0% ahead of forecasts. Statutory earnings per share (EPS) were US$0.75, 8.7% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.
View our latest analysis for Magic Software Enterprises
Taking into account the latest results, Magic Software Enterprises' single analyst currently expect revenues in 2024 to be US$540.0m, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$0.75, roughly flat on the last 12 months. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$473.8m and earnings per share (EPS) of US$0.61 in 2024. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
It will come as no surprise to learn that the analyst has increased their price target for Magic Software Enterprises 7.7% to US$14.00on the back of these upgrades.
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. We would highlight that Magic Software Enterprises' revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Magic Software Enterprises is also expected to grow slower than other industry participants.
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 Magic Software Enterprises following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Magic Software Enterprises that you should be aware 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.
