Yahoo Finance Earnings Beat: IG Design Group plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Shareholders might have noticed that IG Design Group plc (LON:IGR) filed its full-year result this time last week. The early response was not positive, with shares down 3.2% to UK£2.25 in the past week. It looks like a credible result overall - although revenues of US$800m were what the analysts expected, IG Design Group surprised by delivering a (statutory) profit of US$0.36 per share, an impressive 331% above what was forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for IG Design Group
After the latest results, the four analysts covering IG Design Group are now predicting revenues of US$824.2m in 2025. If met, this would reflect a modest 3.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dive 45% to US$0.21 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$832.9m and earnings per share (EPS) of US$0.21 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 18% to UK£3.02, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on IG Design Group, with the most bullish analyst valuing it at UK£3.45 and the most bearish at UK£2.35 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await IG Design Group shareholders.
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 IG Design Group's revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2025 being well below the historical 7.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.6% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than IG Design Group.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on IG Design Group. Long-term earnings power is much more important than next year's profits. We have forecasts for IG Design Group going out to 2027, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for IG Design Group you should know about.
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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.
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