The Vitec Group plc Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Last week, you might have seen that The Vitec Group plc (LON:VTC) released its yearly result to the market. The early response was not positive, with shares down 5.4% to UK£11.35 in the past week. It looks like a credible result overall - although revenues of UK£394m were what the analysts expected, Vitec Group surprised by delivering a (statutory) profit of UK£0.55 per share, an impressive 20% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Vitec Group
Taking into account the latest results, the consensus forecast from Vitec Group's five analysts is for revenues of UK£442.3m in 2022, which would reflect a decent 12% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to drop 11% to UK£0.50 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£443.6m and earnings per share (EPS) of UK£0.56 in 2022. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The consensus price target held steady at UK£18.90, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Vitec Group analyst has a price target of UK£20.00 per share, while the most pessimistic values it at UK£18.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. One thing stands out from these estimates, which is that Vitec Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2022. If achieved, this would be a much better result than the 0.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.5% annually. So it looks like Vitec Group is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Vitec Group going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - Vitec Group has 3 warning signs we think 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.
