Results: Mha Plc Beat Earnings Expectations And Analysts Now Have New Forecasts
Investors in Mha Plc (LON:MHA) had a good week, as its shares rose 2.2% to close at UK£1.40 following the release of its annual results. The result was positive overall - although revenues of UK£251m were in line with what the analysts predicted, Mha surprised by delivering a statutory profit of UK£0.11 per share, modestly greater than 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Mha's five analysts is for revenues of UK£276.0m in 2027. This would reflect a solid 9.8% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to fall 12% to UK£0.096 in the same period. In the lead-up to this report, the analysts had been modelling revenues of UK£275.6m and earnings per share (EPS) of UK£0.099 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
See our latest analysis for Mha
Despite cutting their earnings forecasts,the analysts have lifted their price target 27% to UK£2.03, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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 Mha analyst has a price target of UK£2.20 per share, while the most pessimistic values it at UK£1.79. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Mha is an easy business to forecast or the the analysts are all using similar assumptions.
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. It's pretty clear that there is an expectation that Mha's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 9.8% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.3% per year. So it's pretty clear that, while Mha's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Mha. 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. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Mha going out to 2029, and you can see them free on our platform here..
You still need to take note of risks, for example - Mha has 1 warning sign we think 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.