It's been a good week for Mattioli Woods plc (LON:MTW) shareholders, because the company has just released its latest annual results, and the shares gained 3.1% to UK£6.65. It looks like a pretty bad result, all things considered. Although revenues of UK£108m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 49% to hit UK£0.083 per share. 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 Mattioli Woods  earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Mattioli Woods from four analysts is for revenues of UK£119.5m in 2023 which, if met, would be a decent 10% increase on its sales over the past 12 months. Statutory earnings per share are predicted to bounce 237% to UK£0.27. Before this earnings report, the analysts had been forecasting revenues of UK£118.0m and earnings per share (EPS) of UK£0.27 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With no major changes to earnings forecasts, the consensus price target fell 8.0% to UK£9.18, suggesting that the analysts might have previously been hoping for an earnings upgrade. 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 Mattioli Woods analyst has a price target of UK£9.70 per share, while the most pessimistic values it at UK£8.90. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.



Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Mattioli Woods'historical trends, as the 10% annualised revenue growth to the end of 2023 is roughly in line with the 11% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.2% annually. So although Mattioli Woods is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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 Mattioli Woods' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Mattioli Woods going out to 2025, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Mattioli Woods 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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