Yahoo Finance Results: The Liberty SiriusXM Group Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for The Liberty SiriusXM Group (NASDAQ:LSXM.K) shareholders, because the company has just released its latest second-quarter results, and the shares gained 2.8% to US$41.37. It looks like a credible result overall - although revenues of US$2.3b were what the analysts expected, Liberty SiriusXM Group surprised by delivering a (statutory) profit of US$1.24 per share, an impressive 43% above what was forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Liberty SiriusXM Group
Taking into account the latest results, Liberty SiriusXM Group's seven analysts currently expect revenues in 2022 to be US$9.08b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 21% to US$3.74. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.07b and earnings per share (EPS) of US$3.16 in 2022. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of US$63.25, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Liberty SiriusXM Group analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$50.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 Liberty SiriusXM Group's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2022 being well below the historical 12% p.a. growth over the last five years. Compare this to the 128 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 3.0% per year. So it's pretty clear that, while Liberty SiriusXM Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Liberty SiriusXM Group's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Liberty SiriusXM Group going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Liberty SiriusXM Group 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.
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