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Investors in SciPlay Corporation (NASDAQ:SCPL) had a good week, as its shares rose 9.7% to close at US$14.64 following the release of its quarterly results. It was a pretty mixed result, with revenues beating expectations to hit US$151m. Statutory earnings fell 6.9% short of analyst forecasts, reaching US$0.23 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, SciPlay's twelve analysts are now forecasting revenues of US$586.6m in 2021. This would be a solid 14% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to plummet 39% to US$1.02 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$580.3m and earnings per share (EPS) of US$0.98 in 2021. So the consensus seems to have become somewhat more optimistic on SciPlay's earnings potential following these results.
The consensus price target was unchanged at US$18.58, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on SciPlay, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$12.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of SciPlay'shistorical trends, as next year's 14% revenue growth is roughly in line with 13% annual revenue growth over the past year. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 15% per year. It's clear that while SciPlay's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SciPlay's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$18.58, 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 forecasts for SciPlay going out to 2024, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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