Helloworld Travel Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Last week, you might have seen that Helloworld Travel Limited (ASX:HLO) released its half-year result to the market. The early response was not positive, with shares down 3.6% to AU$4.05 in the past week. It was not a great result overall. While revenues of AU$200m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 13% to hit AU$0.18 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
View our latest analysis for Helloworld Travel
Taking into account the latest results, Helloworld Travel's five analysts currently expect revenues in 2020 to be AU$376.0m, approximately in line with the last 12 months. Statutory per share are forecast to be AU$0.32, approximately in line with the last 12 months. Before this earnings report, analysts had been forecasting revenues of AU$386.9m and earnings per share (EPS) of AU$0.35 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share forecasts.
The consensus price target fell 7.5% to AU$4.93, with the weaker earnings outlook clearly leading analyst valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Helloworld Travel analyst has a price target of AU$5.98 per share, while the most pessimistic values it at AU$4.30. This shows there is still quite 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.
Further, we can compare these estimates to past performance, and see how Helloworld Travel forecasts compare to the wider market's forecast performance. We would highlight that Helloworld Travel's revenue growth is expected to slow, with forecast 0.2% increase next year well below the historical 5.8%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 7.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Helloworld Travel to grow slower than 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 Helloworld Travel. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Helloworld Travel's future valuation.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Helloworld Travel going out to 2022, and you can see them free on our platform here..
We also provide an overview of the Helloworld Travel Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
