Accel Entertainment, Inc. (NYSE:ACEL) just released its latest first-quarter results and things are looking bullish. Accel Entertainment delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$147m, some 11% above indicated. Statutory EPS were US$0.02, an impressive 85% ahead of forecasts. 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.

Check out our latest analysis for Accel Entertainment

After the latest results, the six analysts covering Accel Entertainment are now predicting revenues of US$684.3m in 2021. If met, this would reflect a substantial 92% improvement in sales compared to the last 12 months. Accel Entertainment is also expected to turn profitable, with statutory earnings of US$0.37 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$611.8m and earnings per share (EPS) of US$0.26 in 2021. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.7% to US$15.58per share. 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 Accel Entertainment at US$20.00 per share, while the most bearish prices it at US$13.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. For example, we noticed that Accel Entertainment's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 138% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 18% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 22% per year. Not only are Accel Entertainment's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Accel Entertainment's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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 forecasts for Accel Entertainment going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Accel Entertainment (1 is potentially serious!) that you need to take into consideration.

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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