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US$12.33 - That's What Analysts Think Inspired Entertainment, Inc. (NASDAQ:INSE) Is Worth After These Results

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A week ago, Inspired Entertainment, Inc. (NASDAQ:INSE) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. Sales crushed expectations at US$200m, beating expectations by 28%. Inspired Entertainment reported a statutory loss of US$1.30 per share, which - although not amazing - was much smaller than the analysts predicted. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Inspired Entertainment


Following the latest results, Inspired Entertainment's three analysts are now forecasting revenues of US$214.9m in 2021. This would be a reasonable 7.5% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.77 per share. Before this earnings announcement, the analysts had been modelling revenues of US$214.9m and losses of US$1.77 per share in 2021.

The consensus price target rose 23% to US$12.33, with the analysts increasing their valuations as the business executes in line with forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Inspired Entertainment at US$12.00 per share, while the most bearish prices it at US$9.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Inspired Entertainment'shistorical trends, as the 7.5% annualised revenue growth to the end of 2021 is roughly in line with the 9.2% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 23% per year. So it's pretty clear that Inspired Entertainment is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Inspired Entertainment. Long-term earnings power is much more important than next year's profits. We have forecasts for Inspired Entertainment going out to 2022, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 4 warning signs for Inspired Entertainment (1 is a bit concerning!) that 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.