Shenandoah Telecommunications Company (NASDAQ:SHEN) Just Reported Annual Earnings: Have Analysts Changed Their Mind On The Stock?

As you might know, Shenandoah Telecommunications Company (NASDAQ:SHEN) recently reported its yearly numbers. Sales hit US$267m in line with forecasts, although the company reported a statutory loss per share of US$0.17 that was somewhat smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Shenandoah Telecommunications

Following the latest results, Shenandoah Telecommunications' dual analysts are now forecasting revenues of US$282.5m in 2023. This would be a satisfactory 5.7% improvement in sales compared to the last 12 months. Shenandoah Telecommunications is also expected to turn profitable, with statutory earnings of US$0.015 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$282.5m and losses of US$0.048 per share in 2023. Although we saw no serious change to the revenue outlook, the analysts have definitely increased their earnings estimates, estimating a profit next year, compared to previous forecasts of a loss. So it seems like the consensus has become substantially more bullish on Shenandoah Telecommunications.

The consensus price target was unchanged at US$18.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.

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. One thing stands out from these estimates, which is that Shenandoah Telecommunications is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.7% annualised growth until the end of 2023. If achieved, this would be a much better result than the 23% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.5% annually. So it looks like Shenandoah Telecommunications is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Shenandoah Telecommunications to become profitable next year. 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. 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. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

It is also worth noting that we have found 1 warning sign for Shenandoah Telecommunications that you need to take into consideration.

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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