Shareholders will be ecstatic, with their stake up 22% over the past week following Gaming Realms plc's (LON:GMR) latest annual results. Overall the results were a little better than the analyst was expecting, with revenues beating forecasts by 2.7%to hit UK£6.9m. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Gaming Realms after the latest results.

See our latest analysis for Gaming Realms  AIM:GMR Past and Future Earnings May 3rd 2020

After the latest results, the solitary analyst covering Gaming Realms are now predicting revenues of UK£7.58m in 2020. If met, this would reflect a decent 10% improvement in sales compared to the last 12 months. Before this earnings result, the analyst had predicted UK£7.80m revenue in 2020, although there was no accompanying EPS estimate. It looks like the analyst has become a bit less bullish on Gaming Realms, given the revenue estimates after the latest results.

The average price target fell 47% to UK£0.16, withthe analyst clearly having become less optimistic about Gaming Realms'prospects following its latest earnings.

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. For example, we noticed that Gaming Realms' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 10%, well above its historical decline of 21% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So while Gaming Realms' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.



The Bottom Line

The most important thing to take away is that the analyst downgraded their revenue estimates for next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Gaming Realms' future valuation.

One Gaming Realms broker/analyst has provided estimates out to 2022, which can be seen for free  on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for Gaming Realms (1 doesn't sit too well with us!) that you need to be mindful of.

If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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