Yahoo Finance New Forecasts: Here's What Analysts Think The Future Holds For Ten Entertainment Group plc (LON:TEG)
Ten Entertainment Group plc (LON:TEG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After this upgrade, Ten Entertainment Group's six analysts are now forecasting revenues of UK£52m in 2021. This would be a sizeable 44% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 84% to UK£0.042. Yet prior to the latest estimates, the analysts had been forecasting revenues of UK£47m and losses of UK£0.12 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for Ten Entertainment Group
Despite these upgrades, the analysts have not made any major changes to their price target of UK£2.93, implying that their latest estimates don't have a long term impact on what they think the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Ten Entertainment Group, with the most bullish analyst valuing it at UK£3.30 and the most bearish at UK£2.25 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ten Entertainment Group shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Ten Entertainment Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 44% annualised growth until the end of 2021. If achieved, this would be a much better result than the 0.7% 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. So it looks like Ten Entertainment Group is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Ten Entertainment Group is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Ten Entertainment Group.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ten Entertainment Group analysts - going out to 2023, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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