Investors in The Star Entertainment Group Limited (ASX:SGR) had a good week, as its shares rose 4.1% to close at AU$1.02 following the release of its annual results. Revenues were in line with expectations, at AU$1.9b, while statutory losses ballooned to AU$2.12 per share. 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.

Check out our latest analysis for Star Entertainment Group  earnings-and-revenue-growth

After the latest results, the consensus from Star Entertainment Group's nine analysts is for revenues of AU$1.76b in 2024, which would reflect a noticeable 5.8% decline in revenue compared to the last year of performance. Losses are predicted to fall substantially, shrinking 99% to AU$0.021. Before this earnings announcement, the analysts had been modelling revenues of AU$1.90b and losses of AU$0.025 per share in 2024. Although the revenue estimates have fallen somewhat, Star Entertainment Group'sfuture looks a little different to the past, with a notable improvement in the loss per share forecasts in particular.

The consensus price target was broadly unchanged at AU$1.36, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Star Entertainment Group analyst has a price target of AU$1.80 per share, while the most pessimistic values it at AU$1.20. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.



Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 5.8% annualised revenue decline to the end of 2024 is roughly in line with the historical trend, which saw revenues shrink 6.0% annually 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 8.1% per year. So while a broad number of companies are forecast to grow, unfortunately Star Entertainment Group is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at AU$1.36, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Star Entertainment Group going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk.  We've identified 2 warning signs  with Star Entertainment Group (at least 1 which doesn't sit too well with us)  , and understanding them should be part of your investment process.

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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.