There's been a notable change in appetite for OverActive Media Corp. (CVE:OAM) shares in the week since its third-quarter report, with the stock down 16% to CA$0.21. Revenues of CA$5.8m missed forecasts by 15%, but despite this OverActive Media reported a surprise statutory profit instead of the losses that the analysts had expected. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for OverActive Media
Taking into account the latest results, the current consensus from OverActive Media's dual analysts is for revenues of CA$18.3m in 2023, which would reflect a meaningful 17% increase on its sales over the past 12 months. Losses are forecast to balloon 28% to CA$0.18 per share. Before this earnings announcement, the analysts had been modelling revenues of CA$24.5m and losses of CA$0.12 per share in 2023. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The average price target fell 42% to CA$0.97, implicitly signalling that lower earnings per share are a leading indicator for OverActive Media's valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that OverActive Media's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2023 being well below the historical 46% p.a. growth over the last three years. Compare this to the 20 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it looks like OverActive Media is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of OverActive Media's future valuation.
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 OverActive Media going out as far as 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 4 warning signs for OverActive Media you should be aware of, and 2 of them make us uncomfortable.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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November 20, 2022 at 07:31PM
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Results: OverActive Media Corp. Exceeded Expectations And The Consensus Has Updated Its Estimates - Yahoo Finance
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