Sendas Distribuidora S.A. Just Recorded A 39% Revenue Beat: Here's What Analysts Think

A week ago, Sendas Distribuidora S.A. (BVMF:ASAI3) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Statutory earnings performance was extremely strong, with revenue of R$24b beating expectations by 39% and earnings per share (EPS) of R$0.063, an impressive 28%ahead of expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Sendas Distribuidora

Taking into account the latest results, the most recent consensus for Sendas Distribuidora from twelve analysts is for revenues of R$76.2b in 2024. If met, it would imply a decent 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 29% to R$0.67. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$76.4b and earnings per share (EPS) of R$0.67 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at R$17.01. 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. Currently, the most bullish analyst values Sendas Distribuidora at R$18.00 per share, while the most bearish prices it at R$15.00. This is a very narrow spread of estimates, implying either that Sendas Distribuidora is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Sendas Distribuidora's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. Even after the forecast slowdown in growth, it seems obvious that Sendas Distribuidora is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Sendas Distribuidora going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Sendas Distribuidora (of which 1 is a bit unpleasant!) 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.