Yahoo Finance Rimini Street, Inc. Just Missed EPS By 82%: Here's What Analysts Think Will Happen Next
Rimini Street, Inc. (NASDAQ:RMNI) shareholders are probably feeling a little disappointed, since its shares fell 8.9% to US$2.55 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of US$107m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 82% to hit US$0.01 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Rimini Street
Following last week's earnings report, Rimini Street's four analysts are forecasting 2024 revenues to be US$429.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to sink 13% to US$0.21 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$436.2m and earnings per share (EPS) of US$0.23 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The average price target fell 8.8% to US$3.88, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 Rimini Street, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$3.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. We would highlight that revenue is expected to reverse, with a forecast 1.0% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Rimini Street is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Rimini Street. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 Rimini Street analysts - going out to 2025, and you can see them free on our platform here.
Even so, be aware that Rimini Street is showing 4 warning signs in our investment analysis , and 1 of those is potentially serious...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
