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Earnings Update: Here's Why Analysts Just Lifted Their Eagle Eye Solutions Group plc (LON:EYE) Price Target To UK£3.25

It's been a pretty great week for Eagle Eye Solutions Group plc (LON:EYE) shareholders, with its shares surging 11% to UK£2.72 in the week since its latest yearly results. The statutory results were not great - while revenues of UK£20m were in line with expectations,Eagle Eye Solutions Group lost UK£0.018 a share in the process. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Eagle Eye Solutions Group

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Taking into account the latest results, the current consensus from Eagle Eye Solutions Group's dual analysts is for revenues of UK£24.1m in 2021, which would reflect a notable 18% increase on its sales over the past 12 months. Losses are forecast to balloon 103% to UK£0.036 per share. Before this latest report, the consensus had been expecting revenues of UK£24.0m and UK£0.024 per share in losses. So it's pretty clear the analysts have mixed opinions on Eagle Eye Solutions Group even after this update; although they reconfirmed their revenue numbers, it came at the cost of a per-share losses.

Although the analysts are now forecasting higher losses, the average price target rose 23% to UK£2.65, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business.

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 would highlight that Eagle Eye Solutions Group's revenue growth is expected to slow, with forecast 18% increase next year well below the historical 27%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 7.3% next year. So it's pretty clear that, while Eagle Eye Solutions Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Eagle Eye Solutions Group going out as far as 2023, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Eagle Eye Solutions Group , and understanding these should be part of your investment process.

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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