DATA Communications Management Corp. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts
Shareholders of DATA Communications Management Corp. (TSE:DCM) will be pleased this week, given that the stock price is up 16% to CA$2.61 following its latest quarterly results. Things were not great overall, with a surprise (statutory) loss of CA$0.05 per share on revenues of CA$114m, even though the analysts had been expecting a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, DATA Communications Management's four analysts are now forecasting revenues of CA$485.8m in 2027. This would be a satisfactory 8.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 4,694% to CA$0.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$487.4m and earnings per share (EPS) of CA$0.28 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
View our latest analysis for DATA Communications Management
The consensus price target held steady at CA$4.35, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values DATA Communications Management at CA$6.00 per share, while the most bearish prices it at CA$3.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that DATA Communications Management's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 6.3% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Compare this to the 23 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.0% per year. Factoring in the forecast slowdown in growth, it looks like DATA Communications Management is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for DATA Communications Management. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for DATA Communications Management going out to 2028, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 5 warning signs for DATA Communications Management you should be aware of, and 1 of them is a bit concerning.
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