Team, Inc. Just Released Its Annual Results And Analysts Are Updating Their Estimates
There's been a major selloff in Team, Inc. (NYSE:TISI) shares in the week since it released its full-year report, with the stock down 22% to US$8.30. Revenues of US$1.2b arrived in line with expectations, although statutory losses per share were US$1.07, an impressive 29% smaller than what broker models predicted. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are 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 analysts are expecting for next year.
Check out our latest analysis for Team
Taking into account the latest results, the latest consensus from Team's three analysts is for revenues of US$1.20b in 2020, which would reflect a credible 3.2% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Team forecast to report a statutory profit of US$0.22 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.21b and earnings per share (EPS) of US$1.13 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
The consensus price target held steady at US$21.00, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Team, with the most bullish analyst valuing it at US$24.00 and the most bearish at US$17.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Team shareholders.
In addition, we can look to Team's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Team's revenue growth will slow down substantially, with revenues next year expected to grow 3.2%, compared to a historical growth rate of 7.3% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Team to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Team's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Team analysts - going out to 2021, and you can see them free on our platform here.
It might also be worth considering whether Team's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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