Bearish: Analysts Just Cut Their IDP Education Limited (ASX:IEL) Revenue and EPS estimates
Market forces rained on the parade of IDP Education Limited (ASX:IEL) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the current consensus, from the 13 analysts covering IDP Education, is for revenues of AU$745m in 2027, which would reflect a discernible 6.3% reduction in IDP Education's sales over the past 12 months. Statutory earnings per share are presumed to leap 194% to AU$0.13. Previously, the analysts had been modelling revenues of AU$830m and earnings per share (EPS) of AU$0.23 in 2027. Indeed, we can see that the analysts are a lot more bearish about IDP Education's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for IDP Education
The consensus price target fell 31% to AU$2.90, with the weaker earnings outlook clearly leading analyst valuation estimates.
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. We would highlight that sales are expected to reverse, with a forecast 6.3% annualised revenue decline to the end of 2027. That is a notable change from historical growth of 5.3% 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 5.8% annually for the foreseeable future. It's pretty clear that IDP Education's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for IDP Education. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of IDP Education.
Still, 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 IDP Education going out to 2029, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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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.