Last week, Lifestyle Communities Limited (ASX:LIC) released its annual results on the market. The initial reaction was not positive, with shares dropping by 8.5% to 8.35 AU$ last week. Lifestyle Communities exceeded revenue expectations by 4.0%, reaching 242 million AU$. The statutory earnings per share (EPS) stood at 0.45 AU$, approximately 7.8% lower than analysts‘ estimates. Earnings are a crucial moment for investors as they can track the company’s performance, check analysts‘ forecasts for the upcoming year, and see if there has been a shift in sentiment towards the company. We have gathered the latest forecasts post-results to see what the estimates suggest for the upcoming year.
After the latest results, ten analysts covering lifestyle communities currently forecast revenues of 261.8 million AU$ in 2025. If achieved, this would signify a credible revenue improvement of 8.0% compared to the last 12 months. The statutory earnings per share are expected to increase by 20% to 0.50 AU$. However, prior to the latest results, analysts were predicting revenues of 294.4 million AU$ and earnings per share (EPS) of 0.67 AU$ in 2025. It appears that sentiments have significantly deteriorated post these results, with a substantial decline in revenue estimates and a rather significant decrease in earnings per share.
The consensus price target has dropped by 9.7% to 11.39 AU$, with weaker profit outlooks clearly outpacing valuation estimates. However, this is not the only conclusion we can draw from this data, as some investors also like to consider the spread in estimates when evaluating analysts‘ price targets. There are differing views on Lifestyle Communities, with the most optimistic analyst valuing it at 18.70 AU$ and the most pessimistic at 8.20 AU$ per share. This is quite a wide spread of estimates, suggesting that analysts forecast a broad range of possible outcomes for the company.
Of course, another way to look at these forecasts is to place them in the context of the industry itself. We would like to highlight that Lifestyle Communities‘ revenue growth is likely to slow down, with the forecasted annual growth rate of 8.0% by the end of 2025 significantly lower than the historical growth rate of 16% annually over the past five years. Comparing this to other companies in the industry covered by analysts, which are forecasted to increase their revenues (in total) by 2.2% annually, it is quite clear that while Lifestyle Communities‘ revenue growth is likely to slow down, it is still expected to grow faster than the industry itself.
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In summary, the most important thing to take away is that analysts have lowered their earnings per share estimates, showing a clear decline in sentiment post these results. Unfortunately, they have also lowered their revenue estimates, but the latest forecasts still suggest that the business will grow faster than the industry as a whole. Additionally, analysts have also lowered their price targets, indicating that the latest news has led to greater pessimism regarding the intrinsic value of the business.
With that in mind, we still believe that the longer trajectory of the business is much more important for investors. We have forecasts for Lifestyle Communities up to 2027, and you can view them for free on our platform here.
Nevertheless, remember that Lifestyle Communities is displaying 3 warning signals in our investment analysis that you should know about…
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This article on Simply Wall St is of a general nature. Our comments are based solely on historical data and analysts‘ forecasts, and are based on an objective methodology. Our articles are not financial advice. It does not constitute a recommendation to buy or sell stocks and does not take into account your goals or financial situation. Our goal is to provide you with long-term, data-driven analysis. Please note that our analysis may not include the latest, price-sensitive company announcements or qualitative materials. Simply Wall St has no position in any of the mentioned stocks.