Last week, you might have seen that Shanta Gold Limited (LON:SHG) released its yearly result to the market. The early response was not positive, with shares down 7.3% to UK£0.12 in the past week. Revenues came in at US$114m, in line with expectations, while statutory losses per share were substantially higher than expected, at US$0.0022 per share. 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 Shanta Gold  earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Shanta Gold from two analysts is for revenues of US$166.9m in 2023 which, if met, would be a huge 46% increase on its sales over the past 12 months. Shanta Gold is also expected to turn profitable, with statutory earnings of US$0.011 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$158.3m and earnings per share (EPS) of US$0.015 in 2023. So it's pretty clear the analysts have mixed opinions on Shanta Gold after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.

There's been no major changes to the price target of UK£0.24, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation.

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. The analysts are definitely expecting Shanta Gold's growth to accelerate, with the forecast 46% annualised growth to the end of 2023 ranking favourably alongside historical growth of 2.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 1.3% per year. It seems obvious that as part of the brighter growth outlook, Shanta Gold is expected to grow faster than the wider industry.



The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shanta Gold. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. The consensus price target held steady at UK£0.24, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Shanta Gold. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Shanta Gold going out as far as 2024, and you can see them free on our platform here.

You can also see whether Shanta Gold is carrying too much debt, and whether its balance sheet is healthy, for free  on our platform here.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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