SSP Group plc (LON:SSPG) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
SSP Group plc (LON:SSPG) last week reported its latest half-yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues fell badly short of expectations, with sales of UK£257m, missing analyst estimates by 22%. The 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for SSP Group
Following the latest results, SSP Group's 15 analysts are now forecasting revenues of UK£770.0m in 2021. This would be a sizeable 62% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 63% to UK£0.41. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£907.0m and losses of UK£0.36 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
There was no major change to the consensus price target of UK£3.46, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. There are some variant perceptions on SSP Group, with the most bullish analyst valuing it at UK£4.00 and the most bearish at UK£1.90 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SSP Group's past performance and to peers in the same industry. One thing stands out from these estimates, which is that SSP Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 163% annualised growth until the end of 2021. If achieved, this would be a much better result than the 4.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 15% per year. Not only are SSP Group'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 most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for SSP Group going out to 2025, and you can see them free on our platform here..
Before you take the next step you should know about the 4 warning signs for SSP Group (2 don't sit too well with us!) that we have uncovered.
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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