Revenue Beat: AcuityAds Holdings Inc. Exceeded Revenue Forecasts By 9.5% And Analysts Are Updating Their Estimates
AcuityAds Holdings Inc. (TSE:AT) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to CA$6.66 in the week after its latest third-quarter results. It was a workmanlike result, with revenues of CA$26m coming in 9.5% ahead of expectations, and statutory earnings per share of CA$0.02, in line with analyst appraisals. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for AcuityAds Holdings
Taking into account the latest results, the current consensus from AcuityAds Holdings’ five analysts is for revenues of CA$128.6m in 2021, which would reflect a decent 19% increase on its sales over the past 12 months. Per-share earnings are expected to soar 204% to CA$0.10. Before this earnings report, the analysts had been forecasting revenues of CA$126.4m and earnings per share (EPS) of CA$0.075 in 2021. Although the revenue estimates have not really changed, we can see there’s been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 64% to CA$7.83. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. The most optimistic AcuityAds Holdings analyst has a price target of CA$8.00 per share, while the most pessimistic values it at CA$4.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It’s pretty clear that there is an expectation that AcuityAds Holdings’ revenue growth will slow down substantially, with revenues next year expected to grow 19%, compared to a historical growth rate of 33% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 30% next year. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than AcuityAds Holdings.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AcuityAds Holdings’ earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for AcuityAds Holdings going out to 2022, and you can see them free on our platform here..
That said, it’s still necessary to consider the ever-present spectre of investment risk. We’ve identified 4 warning signs with AcuityAds Holdings (at least 1 which can’t be ignored) , and understanding them should be part of your investment process.
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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