Inspired Entertainment, Inc. (NASDAQ:INSE) Just Reported And Analysts Have Been Cutting Their Estimates

It’s been a pretty great week for Inspired Entertainment, Inc. (NASDAQ:INSE) shareholders, with its shares surging 14% to US$7.96 in the week since its latest first-quarter results. Revenues of US$57m came in a modest 3.2% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.02 coming in a substantial 72% smaller than what the analysts had expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus, from the five analysts covering Inspired Entertainment, is for revenues of US$255.1m in 2026. This implies a not inconsiderable 15% reduction in Inspired Entertainment’s revenue over the past 12 months. Earnings are expected to improve, with Inspired Entertainment forecast to report a statutory profit of US$0.67 per share. In the lead-up to this report, the analysts had been modelling revenues of US$270.0m and earnings per share (EPS) of US$0.81 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

View our latest analysis for Inspired Entertainment

The analysts made no major changes to their price target of US$13.33, suggesting the downgrades are not expected to have a long-term impact on Inspired Entertainment’s valuation. 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. Currently, the most bullish analyst values Inspired Entertainment at US$20.00 per share, while the most bearish prices it at US$10.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 20% by the end of 2026. This indicates a significant reduction from annual growth of 8.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.0% per year. It’s pretty clear that Inspired Entertainment’s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Inspired Entertainment. 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.

With that in mind, we wouldn’t be too quick to come to a conclusion on Inspired Entertainment. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Inspired Entertainment going out to 2028, and you can see them free on our platform here..

Even so, be aware that Inspired Entertainment is showing 1 warning sign in our investment analysis , 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.