Yahoo Finance Good Energy Group PLC Just Beat Revenue By 16%: Here's What Analysts Think Will Happen Next
It's been a sad week for Good Energy Group PLC (LON:GOOD), who've watched their investment drop 10% to UK£1.73 in the week since the company reported its interim result. It was a mildly positive result, with revenues exceeding expectations at UK£67m, while statutory earnings per share (EPS) of UK£0.075 were in line with analyst forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.
Check out our latest analysis for Good Energy Group
After the latest results, the sole analyst covering Good Energy Group are now predicting revenues of UK£129.1m in 2020. If met, this would reflect an okay 3.9% improvement in sales compared to the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analyst forecasting statutory losses of -UK£0.12 per share in 2020. Before this earnings report, the analyst had been forecasting revenues of UK£129.2m and earnings per share (EPS) of UK£0.092 in 2020. While the analyst has made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.
As a result, there was no major change to the consensus price target of UK£3.00, with the analyst implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Good Energy Group's revenue growth will slow down substantially, with revenues next year expected to grow 3.9%, compared to a historical growth rate of 6.3% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Good Energy Group is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analyst is expecting Good Energy Group to become unprofitable 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 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. We have analyst estimates for Good Energy Group going out as far as 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - Good Energy Group has 5 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
