TheWorks.co.uk plc (LON:WRKS) shareholders are probably feeling a little disappointed, since its shares fell 8.6% to UK£0.29 in the week after its latest yearly results. Revenues were UK£280m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at UK£0.084, an impressive 133% ahead of estimates. 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.
After the latest results, the twin analysts covering TheWorks.co.uk are now predicting revenues of UK£294.0m in 2024. If met, this would reflect an okay 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 10% to UK£0.093. Before this earnings report, the analysts had been forecasting revenues of UK£293.5m and earnings per share (EPS) of UK£0.043 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.
The consensus price target rose 12% to UK£0.63, suggesting that higher earnings estimates flow through to the stock's valuation as well.
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 can infer from the latest estimates that forecasts expect a continuation of TheWorks.co.uk'shistorical trends, as the 5.0% annualised revenue growth to the end of 2024 is roughly in line with the 5.9% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.8% annually. So although TheWorks.co.uk is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around TheWorks.co.uk's earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for TheWorks.co.uk going out as far as 2026, and you can see them free on our platform here.
It is also worth noting that we have found 5 warning signs for TheWorks.co.uk (1 is significant!) that you need to take into consideration.
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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.