As you might know, UOL Group Limited (SGX:U14) recently reported its half-yearly numbers. Revenue of S$1.5b beat expectations by an impressive 28%, while statutory earnings per share (EPS) were S$0.36, in line with estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for UOL Group

Following the recent earnings report, the consensus from nine analysts covering UOL Group is for revenues of S$2.60b in 2022, implying a considerable 14% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to nosedive 42% to S$0.40 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$2.44b and earnings per share (EPS) of S$0.46 in 2022. So it's pretty clear the analysts have mixed opinions on UOL Group after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

There's been no major changes to the price target of S$8.41, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on UOL Group, with the most bullish analyst valuing it at S$9.27 and the most bearish at S$7.20 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 26% by the end of 2022. This indicates a significant reduction from annual growth of 4.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - UOL Group is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. The consensus price target held steady at S$8.41, with the latest estimates not enough to have an impact on their price targets.

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 UOL Group going out to 2024, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with UOL Group (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

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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.