Results: Digital Core REIT Delivered A Surprise Loss And Now Analysts Have New Forecasts
It's been a good week for Digital Core REIT (SGX:DCRU) shareholders, because the company has just released its latest annual results, and the shares gained 7.9% to US$0.68. Revenues came in at US$106m, in line with estimates, while Digital Core REIT reported a statutory loss of US$0.0012 per share, well short of prior analyst forecasts for a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Digital Core REIT
Following the latest results, Digital Core REIT's five analysts are now forecasting revenues of US$110.5m in 2023. This would be a satisfactory 4.1% improvement in sales compared to the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$109.9m and earnings per share (EPS) of US$0.039 in 2023. So we can see that while the consensus made no real change to its revenue estimates, it also no longer provides an earnings per share estimate, suggesting that revenues are what the market is focusing on after the latest results.
Intriguingly,the analysts have cut their price target 19% to US$0.82 showing a clear decline in sentiment around Digital Core REIT's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Digital Core REIT at US$0.98 per share, while the most bearish prices it at US$0.70. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 Digital Core REIT's revenue growth is expected to slow, with the forecast 4.1% annualised growth rate until the end of 2023 being well below the historical 12% p.a. growth over the last three years. Compare this to the 40 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.6% per year. So it's pretty clear that, while Digital Core REIT's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The clear take away from these updates is that the analysts made no change to their revenue estimates for next year, with the business apparently performing in line with their models. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
At least one of Digital Core REIT's five analysts has provided estimates out to 2025, which can be seen for free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Digital Core REIT you should be aware of, and 1 of them is a bit concerning.
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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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