It's been a sad week for Kelsian Group Limited (ASX:KLS), who've watched their investment drop 19% to AU$3.10 in the week since the company reported its half-year result. Results overall were not great, with earnings of AU$0.074 per share falling drastically short of analyst expectations. Meanwhile revenues hit AU$1.1b and were slightly better than forecasts. The analysts 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Kelsian Group

Taking into account the latest results, the consensus forecast from Kelsian Group's eight analysts is for revenues of AU$2.19b in 2025. This reflects an okay 3.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 10% to AU$0.20. Before this earnings report, the analysts had been forecasting revenues of AU$2.14b and earnings per share (EPS) of AU$0.23 in 2025. So it's pretty clear the analysts have mixed opinions on Kelsian Group after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

The analysts also cut Kelsian Group's price target 16% to AU$4.38, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Kelsian Group, with the most bullish analyst valuing it at AU$6.10 and the most bearish at AU$3.20 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Kelsian Group's revenue growth is expected to slow, with the forecast 6.4% annualised growth rate until the end of 2025 being well below the historical 23% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.6% annually. So it's pretty clear that, while Kelsian Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Kelsian Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kelsian Group analysts - going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Kelsian Group that you need to be mindful of.

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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.