Shareholders in iHeartMedia, Inc. (NASDAQ:IHRT) had a terrible week, as shares crashed 67% to US$0.58 in the week since its latest third-quarter results. Revenues were US$1.0b, with iHeartMedia reporting some 2.2% below analyst expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, iHeartMedia's four analysts are now forecasting revenues of US$4.11b in 2027. This would be a modest 2.3% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 84% to US$0.23 per share. Before this earnings report, the analysts had been forecasting revenues of US$4.14b and earnings per share (EPS) of US$0.013 in 2027. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.
Check out our latest analysis for iHeartMedia
The consensus price target fell 76% to US$0.88per share, with the analysts clearly concerned by ballooning losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on iHeartMedia, with the most bullish analyst valuing it at US$1.00 and the most bearish at US$0.75 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting iHeartMedia is an easy business to forecast or the the analysts are all using similar assumptions.
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 iHeartMedia'shistorical trends, as the 1.9% annualised revenue growth to the end of 2027 is roughly in line with the 1.6% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 10% annually. So it's pretty clear that iHeartMedia is expected to grow slower than similar companies in the same industry.
The Bottom Line
The biggest low-light for us was that the forecasts for iHeartMedia dropped from profits to a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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 iHeartMedia'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 forecasts for iHeartMedia going out to 2028, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with iHeartMedia , and understanding them should be part of your investment process.
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