One of the biggest stories of last week was how Tremor International Ltd (LON:TRMR) shares plunged 34% in the week since its latest second-quarter results, closing yesterday at UK£1.68. It looks like a pretty bad result, given that revenues fell 13% short of analyst estimates at US$84m, and the company reported a statutory loss of US$0.04 per share instead of the profit that the analysts had been forecasting. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Tremor International

Following the latest results, Tremor International's five analysts are now forecasting revenues of US$342.1m in 2023. This would be a satisfactory 2.3% improvement in revenue compared to the last 12 months. Losses are presumed to be contained, narrowing 12% from last year to US$0.15, on a statutory basis. Before this earnings report, the analysts had been forecasting revenues of US$419.2m and earnings per share (EPS) of US$0.18 in 2023. There looks to have been a major change in sentiment regarding Tremor International's prospects following the latest results, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

The consensus price target fell 23% to UK£8.77, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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 Tremor International analyst has a price target of UK£10.04 per share, while the most pessimistic values it at UK£6.28. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Tremor International shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Tremor International'shistorical trends, as the 4.6% annualised revenue growth to the end of 2023 is roughly in line with the 4.5% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 4.4% per year. So although Tremor International is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Tremor International dropped from profits to a loss next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Tremor International analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Tremor International .

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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.