Evertz Technologies Limited Analysts Are Pretty Bullish On The Stock After Recent Results
Evertz Technologies Limited (TSE:ET) shares fell 5.4% to CA$17.13 in the week since its latest second-quarter results. Evertz Technologies reported in line with analyst predictions, delivering revenues of CA$120m and earnings per share of CA$0.27, suggesting the business is executing well and in line with its plan. 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. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
View our latest analysis for Evertz Technologies
Taking into account the latest results, the latest consensus from Evertz Technologies's three analysts is for revenues of CA$462.9m in 2020, which would reflect a satisfactory 2.5% improvement in sales compared to the last 12 months. Earnings per share are forecast to be CA$0.96, approximately in line with the last 12 months. Before this earnings report, analysts had been forecasting revenues of CA$465.6m and earnings per share (EPS) of CA$0.99 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.
Despite cutting their earnings forecasts, analysts have lifted their price target 5.4% to CA$19.67, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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 Evertz Technologies analyst has a price target of CA$20.00 per share, while the most pessimistic values it at CA$19.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Evertz Technologies's performance in recent years. We would highlight that Evertz Technologies's revenue growth is expected to slow, with forecast 2.5% increase next year well below the historical 4.6%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.6% next year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Evertz Technologies to grow at about the same rate as the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Evertz Technologies. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Evertz Technologies analysts - going out to 2021, and you can see them free on our platform here.
You can also see our analysis of Evertz Technologies's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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