Earnings Miss: São Martinho S.A. Missed EPS By 47% And Analysts Are Revising Their Forecasts

As you might know, São Martinho S.A. (BVMF:SMTO3) last week released its latest third-quarter, and things did not turn out so great for shareholders. Unfortunately, São Martinho delivered a serious earnings miss. Revenues of R$1.6b were 14% below expectations, and statutory earnings per share of R$0.61 missed estimates by 47%. 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 São Martinho

Taking into account the latest results, the most recent consensus for São Martinho from six analysts is for revenues of R$7.47b in 2025. If met, it would imply a notable 19% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 8.6% to R$3.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$7.60b and earnings per share (EPS) of R$3.30 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at R$36.64, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 São Martinho at R$44.00 per share, while the most bearish prices it at R$31.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 15% growth on an annualised basis. That is in line with its 16% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.0% per year. So although São Martinho is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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 São Martinho. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at R$36.64, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on São Martinho. 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 São Martinho going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for São Martinho that 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.