It's been a mediocre week for Spark New Zealand Limited (NZSE:SPK) shareholders, with the stock dropping 12% to NZ$3.85 in the week since its latest full-year results. Statutory earnings per share fell badly short of expectations, coming in at NZ$0.17, some 24% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at NZ$3.9b. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Spark New Zealand  earnings-and-revenue-growth

Taking into account the latest results, Spark New Zealand's eight analysts currently expect revenues in 2025 to be NZ$3.88b, approximately in line with the last 12 months. Per-share earnings are expected to swell 19% to NZ$0.21. In the lead-up to this report, the analysts had been modelling revenues of NZ$4.01b and earnings per share (EPS) of NZ$0.24 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The analysts made no major changes to their price target of NZ$4.68, suggesting the downgrades are not expected to have a long-term impact on Spark New Zealand's valuation. 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. The most optimistic Spark New Zealand analyst has a price target of NZ$5.30 per share, while the most pessimistic values it at NZ$4.20. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Spark New Zealand's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Spark New Zealand's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.4% growth on an annualised basis. This is compared to a historical growth rate of 3.7% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Spark New Zealand.



The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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. 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.

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 estimates - from multiple Spark New Zealand analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Spark New Zealand has  3 warning signs  (and 1 which doesn't sit too well with us)  we think you should know about.

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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.