It's been a pretty great week for Ion Beam Applications SA (EBR:IBAB) shareholders, with its shares surging 17% to €8.00 in the week since its latest full-year results. Revenues of €283m beat expectations by a respectable 7.8%, although statutory losses per share increased. Ion Beam Applications lost , which was 100% more than what the analysts had included in their models. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ion Beam Applications after the latest results.
Following the latest results, Ion Beam Applications's twin analysts are now forecasting revenues of €305.5m in 2020. This would be a solid 8.1% improvement in sales compared to the last 12 months. Ion Beam Applications is also expected to turn profitable, with statutory earnings of €1.08 per share. Before this earnings result, the analysts had predicted €276.8m revenue in 2020, although there was no accompanying EPS estimate. It's clear that even though the consensus made a solid increase in their revenue forecasts, the analysts also began providing earnings per share estimates, with earnings becoming more important to the investment case going forwards.
As a result, it might be a surprise to see thatthe analysts have cut their price target 27% to €11.93, which could suggest the forecast improvement in performance is not expected to last.
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. For example, we noticed that Ion Beam Applications's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 8.1%, well above its historical decline of 2.4% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 7.1% next year. So it looks like Ion Beam Applications is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is the bullish forecast for profits next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Ion Beam Applications will grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Ion Beam Applications going out as far as 2024, and you can see them free on our platform here.
Even so, be aware that Ion Beam Applications is showing 3 warning signs in our investment analysis , and 2 of those shouldn't be ignored...
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