Yahoo Finance Uniti Group Inc. Just Missed EPS By 10%: Here's What Analysts Think Will Happen Next
Shareholders of Uniti Group Inc. (NASDAQ:UNIT) will be pleased this week, given that the stock price is up 12% to US$13.16 following its latest quarterly results. Revenues were in line with forecasts, at US$268m, although statutory earnings per share came in 10% below what the analysts expected, at US$0.20 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Uniti Group
Following last week's earnings report, Uniti Group's nine analysts are forecasting 2021 revenues to be US$1.09b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 3,121% to US$0.53. Before this earnings report, the analysts had been forecasting revenues of US$1.09b and earnings per share (EPS) of US$0.54 in 2021. 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 minor downgrade to their earnings per share forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.1% to US$12.45, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. There are some variant perceptions on Uniti Group, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$9.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 Uniti Group's revenue growth is expected to slow, with the forecast 2.7% annualised growth rate until the end of 2021 being well below the historical 5.1% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Uniti Group is also expected to grow slower than other industry participants.
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, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Uniti Group's revenues are expected to perform worse than the wider 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.
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 Uniti Group analysts - going out to 2023, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 5 warning signs for Uniti Group you should be aware of, and 1 of them is potentially serious.
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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