Investors in The Lottery Corporation Limited (ASX:TLC) had a good week, as its shares rose 3.6% to close at AU$5.13 following the release of its half-year results. Results look mixed - while revenue fell marginally short of analyst estimates at AU$1.8b, statutory earnings beat expectations 6.8%, with Lottery reporting profits of AU$0.079 per share. 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'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 Lottery ASX:TLC Earnings and Revenue Growth February 20th 2025

Following the recent earnings report, the consensus from 14 analysts covering Lottery is for revenues of AU$3.74b in 2025. This implies a noticeable 3.9% decline in revenue compared to the last 12 months. Statutory per-share earnings are expected to be AU$0.16, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of AU$3.84b and earnings per share (EPS) of AU$0.17 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of AU$5.41, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Lottery's market value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Lottery, with the most bullish analyst valuing it at AU$5.80 and the most bearish at AU$5.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 7.6% annualised decline to the end of 2025. That is a notable change from historical growth of 8.1% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. It's pretty clear that Lottery's revenues are expected to perform substantially worse than the wider industry.

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The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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, long term profitability is more important for the value creation process. The consensus price target held steady at AU$5.41, with the latest estimates not enough to have an impact on their price targets.

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 Lottery going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Lottery has  2 warning signs  (and 1 which is potentially serious)  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.

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