Voyager Digital Ltd. shareholders had a mediocre week this week. The stock declined 18% to CA$9.84 in the week since the company reported its latest quarterly results. Sadly, statutory earnings per share came in -93% below expectations, at US$0.01. However, revenue performance was much better, with revenues of US$165m showing up 12% ahead of expectations. Investors can track a company’s performance through its report, view forecasts for next year, and see if expectations have changed. Below are gathered the latest statutory forecasts for next year to see what the analysts expect.
Taking into account the latest results, the most recent consensus for Voyager Digital from seven analysts is for revenues of US$548.6m in 2022 which, if met, would be a substantial 32% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 74% to US$0.10 per share. In the lead-up to this report, the analysts had been modelling revenues of US$560.9m and earnings per share (EPS) of US$0.25 in 2022. The analysts have made an abrupt about-face on Voyager Digital, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.
See how voyager digitals performance is related to VGX here: https://coinvoyagers.com/how-is-vgx-token-price-affected-by-voyager-digital-stock-value-decreases-in-2022/
The consensus price target fell 12% to CA$27.45, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. Currently, the most bullish analyst values Voyager Digital at CA$31.52 per share, while the most bearish prices it at CA$19.14. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Taking a look at the bigger picture now, one of the ways one can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It’s pretty clear that there is an expectation that Voyager Digital’s revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 74% growth on an annualised basis. This is compared to a historical growth rate of 153% over the past three years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 52% annually. Factoring in the forecast slowdown in growth, it’s pretty clear that Voyager Digital is still expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts are expecting Voyager Digital to become unprofitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.