The investors in Blue Prism Group plc's (LON:PRSM) will be rubbing their hands together with glee today, after the share price leapt 33% to UK£16.69 in the week following its annual results. Blue Prism Group reported revenues of UK£101m, in line with expectations, but it unfortunately also reported (statutory) losses of UK£1.05 per share, which were slightly larger than expected. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Blue Prism Group from eight analysts is for revenues of UK£170.5m in 2020, which is a sizeable 69% increase on its sales over the past 12 months. Per-share statutory losses are expected to see a sharp uptick, reaching UK£0.88. Before this earnings announcement, analysts had been forecasting revenues of UK£170.6m and losses of UK£0.96 per share in 2020. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the small increase to earnings per share expectations following these results.
There's been no major changes to the consensus price target of UK£17.57, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Blue Prism Group analyst has a price target of UK£27.00 per share, while the most pessimistic values it at UK£10.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. We can infer from the latest estimates that analysts are expecting a continuation of Blue Prism Group's historical trends, as next year's forecast 69% revenue growth is roughly in line with 59% 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 7.2% per year. So although Blue Prism Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at Blue Prism Group. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Blue Prism Group analysts - going out to 2022, and you can see them free on our platform here.
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