Revenue Beat: Even Construtora e Incorporadora S.A. Exceeded Revenue Forecasts By 12% And Analysts Are Updating Their Estimates

It's been a pretty great week for Even Construtora e Incorporadora S.A. (BVMF:EVEN3) shareholders, with its shares surging 13% to R$6.15 in the week since its latest quarterly results. Even Construtora e Incorporadora beat revenue forecasts by a solid 12% to hit R$625m. Statutory earnings per share came in at R$0.51, in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Even Construtora e Incorporadora after the latest results.

View our latest analysis for Even Construtora e Incorporadora

Taking into account the latest results, the five analysts covering Even Construtora e Incorporadora provided consensus estimates of R$2.30b revenue in 2023, which would reflect a discernible 7.3% decline on its sales over the past 12 months. Before this earnings report, the analysts had been forecasting revenues of R$2.28b and earnings per share (EPS) of R$0.79 in 2023. Overall, while the analysts have reconfirmed their revenue estimates, the consensus now no longer provides an EPS estimate, suggesting that the market believes revenue is more important after these latest results.

The average price target fell 13% to R$5.60, withthe analysts clearly having become less optimistic about Even Construtora e Incorporadora'sprospects following its latest earnings. 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 Even Construtora e Incorporadora analyst has a price target of R$7.00 per share, while the most pessimistic values it at R$5.00. 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 Even Construtora e Incorporadora shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.6% by the end of 2023. This indicates a significant reduction from annual growth of 11% 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 7.1% per year. It's pretty clear that Even Construtora e Incorporadora's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their revenue estimates for next year, suggesting that the business is performing in line with expectations. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse 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.

We have estimates for Even Construtora e Incorporadora from its five analysts out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Even Construtora e Incorporadora you should be aware of, and 1 of them doesn't sit too well with us.

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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.