Yahoo Finance TELUS International (Cda) Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
As you might know, TELUS International (Cda) Inc. (NYSE:TIXT) recently reported its full-year numbers. It looks like a credible result overall - although revenues of US$2.2b were in line with what the analysts predicted, TELUS International (Cda) surprised by delivering a statutory profit of US$0.29 per share, a notable 14% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TELUS International (Cda) after the latest results.
Check out our latest analysis for TELUS International (Cda)
Following the latest results, TELUS International (Cda)'s 13 analysts are now forecasting revenues of US$2.58b in 2022. This would be a meaningful 17% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 112% to US$0.62. In the lead-up to this report, the analysts had been modelling revenues of US$2.55b and earnings per share (EPS) of US$0.66 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The average price target fell 5.4% to US$37.64, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values TELUS International (Cda) at US$50.00 per share, while the most bearish prices it at US$31.00. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that TELUS International (Cda)'s revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2022 being well below the historical 30% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. Even after the forecast slowdown in growth, it seems obvious that TELUS International (Cda) is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.
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 forecasts for TELUS International (Cda) going out to 2024, 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 TELUS International (Cda) , and understanding these should be part of your investment process.
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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.
