Sureserve Group plc Just Beat EPS By 8.3%: Here's What Analysts Think Will Happen Next
Sureserve Group plc (LON:SUR) just released its yearly report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 3.2% to hit UK£212m. Statutory earnings per share (EPS) came in at UK£0.026, some 8.3% above what analysts had 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Sureserve Group after the latest results.
See our latest analysis for Sureserve Group
After the latest results, the only analyst covering Sureserve Group are now predicting revenues of UK£222.8m in 2020. If met, this would reflect a reasonable 5.1% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to jump 21% to UK£0.032. Before this earnings result, analysts had predicted UK£215.4m revenue in 2020, although there was no accompanying EPS estimate. So we can see that while the consensus made a slight bump in revenue estimates, it also began providing earnings per share estimates, suggesting Sureserve Group's earnings have become more important to the investment case after these results.
It will come as no surprise to learn that analysts have increased their price target for Sureserve Group 12% to UK£0.47 on the back of these upgrades.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. For example, we noticed that Sureserve Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 5.1%, well above its historical decline of 14% a year 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 revenue grow 4.9% per year. So while Sureserve Group's revenues are expected to improve, it seems that analysts are expecting it to grow at about the same rate as the overall market.
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 Sureserve Group will 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Sureserve Group going out as far as 2022, and you can see them free on our platform here.
It might also be worth considering whether Sureserve Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, 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.
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