Stock Analysis

Atacadão S.A. Just Missed EPS By 59%: Here's What Analysts Think Will Happen Next

BOVESPA:CRFB3
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It's been a good week for Atacadão S.A. (BVMF:CRFB3) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.7% to R$11.90. Revenue of R$26b surpassed estimates by 2.1%, although statutory earnings per share missed badly, coming in 59% below expectations at R$0.02 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Atacadão

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BOVESPA:CRFB3 Earnings and Revenue Growth May 9th 2024

Taking into account the latest results, the current consensus from Atacadão's twelve analysts is for revenues of R$119.9b in 2024. This would reflect a decent 8.6% increase on its revenue over the past 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$116.4b and earnings per share (EPS) of R$0.64 in 2024. What's really interesting is that while the consensus made a modest lift to revenue estimates, it no longer provides an earnings per share estimate. This suggests that revenues are now the focus of the business after this latest result.

We'd also point out that thatthe analysts have made no major changes to their price target of R$14.37. 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 Atacadão at R$17.00 per share, while the most bearish prices it at R$10.30. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Atacadão's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Compare this to the 8 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it looks like Atacadão is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The highlight for us was that the analysts increased their revenue forecasts for Atacadão next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Atacadão will grow in line with the overall 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.

At least one of Atacadão's twelve analysts has provided estimates out to 2026, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Atacadão (1 doesn't sit too well with us) you should be aware of.

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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.