Yahoo Finance XTEK Limited Just Missed EPS By 21%: Here's What Analysts Think Will Happen Next
XTEK Limited (ASX:XTE) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasts think of the company following this report. Revenue of AU$89m surpassed estimates by 2.1%, although statutory earnings per share missed badly, coming in 21% below expectations at AU$0.06 per share. The analyst 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 analyst latest (statutory) post-earnings forecasts for next year.
View our latest analysis for XTEK
After the latest results, the single analyst covering XTEK are now predicting revenues of AU$93.9m in 2024. If met, this would reflect a credible 5.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 43% to AU$0.086. Yet prior to the latest earnings, the analyst had been anticipated revenues of AU$89.6m and earnings per share (EPS) of AU$0.097 in 2024. So it's pretty clear the analyst has mixed opinions on XTEK after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.
The analyst also cut XTEK's price target 13% to AU$0.70, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue.
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 XTEK's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that XTEK is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for XTEK. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of XTEK's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for XTEK going out as far as 2026, and you can see them free on our platform here.
Even so, be aware that XTEK is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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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.
