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Service Stream Limited Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Simply Wall St · 08/21 20:58

Investors in Service Stream Limited (ASX:SSM) had a good week, as its shares rose 3.4% to close at AU$2.14 following the release of its yearly results. Revenues came in 5.6% below expectations, at AU$2.3b. Statutory earnings per share were relatively better off, with a per-share profit of AU$0.094 being roughly in line with analyst 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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ASX:SSM Earnings and Revenue Growth August 21st 2025

Taking into account the latest results, the current consensus from Service Stream's seven analysts is for revenues of AU$2.51b in 2026. This would reflect a credible 7.8% increase on its revenue over the past 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$2.59b and earnings per share (EPS) of AU$0.11 in 2026. So we can see that while the consensus made a minor downgrade to revenue estimates, it no longer provides an earnings per share estimate. This suggests that the market is now more focused on revenue after the latest result.

View our latest analysis for Service Stream

The average price target rose 8.1% to AU$2.33, with the analysts clearly having become more optimistic about Service Stream'sprospects following these results. 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. There are some variant perceptions on Service Stream, with the most bullish analyst valuing it at AU$2.45 and the most bearish at AU$2.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Service Stream's revenue growth is expected to slow, with the forecast 7.8% annualised growth rate until the end of 2026 being well below the historical 24% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.2% annually. So it's pretty clear that, while Service Stream's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

We have estimates for Service Stream from its seven analysts out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Service Stream has 1 warning sign we think you should be aware of.