Stingray Group Inc. (TSE:RAY) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results overall were not great, with earnings of CA$0.10 per share falling drastically short of analyst expectations. Meanwhile revenues hit CA$158m and were slightly better than forecasts. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the seven analysts covering Stingray Group are now predicting revenues of CA$653.7m in 2027. If met, this would reflect a huge 26% improvement in revenue compared to the last 12 months. Stingray Group is also expected to turn profitable, with statutory earnings of CA$1.06 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$649.7m and earnings per share (EPS) of CA$1.57 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
See our latest analysis for Stingray Group
The consensus price target held steady at CA$21.36, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Stingray Group analyst has a price target of CA$24.00 per share, while the most pessimistic values it at CA$19.00. This is a very narrow spread of estimates, implying either that Stingray Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Stingray Group's past performance and to peers in the same industry. The analysts are definitely expecting Stingray Group's growth to accelerate, with the forecast 36% annualised growth to the end of 2027 ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Stingray Group is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Stingray Group. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Stingray Group analysts - going out to 2029, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Stingray Group (1 is potentially serious!) that you should be aware of.
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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.