You may have seen Lifestyle Communities Limited (ASX:LIC) release its annual results to the market last week. Initial reaction was poor, with the share price falling 8.5% to A$8.35 last week. Lifestyle Communities posted 4.0% higher sales to A$242 million. Statutory earnings per share (EPS) were A$0.45, roughly 7.8% below analyst expectations. Earnings releases are an important time for investors, as they allow them to track a company's performance, see what the analysts are predicting for next year, and see if there's been a change in sentiment towards the company. So, we've gathered predictions after the latest earnings release to try and predict what the next year could hold.
View our latest analysis for Lifestyle Communities
Revenue and Revenue Growth
Following the latest financial results, the ten analysts covering Lifestyle Communities are now forecasting revenues of A$261.8m in 2025. If met, this forecast would represent a solid 8.0% improvement in revenues compared to the last 12 months. Statutory earnings per share are forecast to rise 20% to A$0.50. However, prior to the latest financial results, the analysts had been forecasting revenues of A$294.4m and earnings per share (EPS) of A$0.67 in 2025. Sentiment appears to have fallen significantly following these financial results, with revenue forecasts now falling sharply and the earnings per share figures also dropping quite substantially.
The consensus price target fell 9.7% to A$11.39, with weaker earnings guidance clearly outweighing valuation expectations. However, that's not the only conclusion that can be drawn from this data. Some investors also want to consider the spread in estimates when assessing analyst price targets. There are a variety of views on Lifestyle Communities, with the most bullish analyst valuing it at A$18.70 per share and the most bearish at A$8.20. This is a fairly wide spread in estimates, suggesting that analysts are predicting a range of outcomes for the business.
The story continues
Of course, another way to look at these forecasts is to place them in the context of the industry itself. Lifestyle Communities' revenue growth is expected to slow, with a forecast annual growth rate of 8.0% through the end of 2025 well below the 16% annual growth rate over the past five years. If we compare this to other companies in the industry covered by analysts, their revenues are forecast to grow at 2.2% per year (in total). So, while Lifestyle Communities' revenue growth is expected to slow, it's clear that it is expected to grow faster than the industry itself.
Conclusion
Most importantly, the analysts lowered their earnings per share forecasts, indicating a clear drop in sentiment following these results. Unfortunately, the analysts also lowered their revenue forecasts, although their latest estimates still suggest that the business will grow at a faster pace than the overall industry. Additionally, the analysts also lowered their price targets, suggesting that the latest news has led to increased pessimism about the business's intrinsic value.
With that in mind, we believe it is the long-term trajectory of the business that is far more important for investors to consider, and we have forecasts for Lifestyle Communities out to 2027, which you can see free of charge on our platform here.
Nevertheless, Lifestyle Communities is showing 3 warning signs in our investment analysis you should know about…
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
