Stock Analysis

Here's What Analysts Are Forecasting For Méliuz S.A. (BVMF:CASH3) After Its Full-Year Results

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Shareholders of Méliuz S.A. (BVMF:CASH3) will be pleased this week, given that the stock price is up 10% to R$1.08 following its latest full-year results. Despite revenues of R$368m falling 6.1% short of expectations, statutory losses of R$0.07 per share were well contained, and in line with analyst models. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Méliuz

BOVESPA:CASH3 Earnings and Revenue Growth March 17th 2023

After the latest results, the five analysts covering Méliuz are now predicting revenues of R$514.5m in 2023. If met, this would reflect a substantial 40% improvement in sales compared to the last 12 months. Yet prior to the latest earnings, the analysts had been forecasting revenues of R$578.3m and losses of R$0.0091 per share in 2023. So we can see that while the consensus made a real cut to revenue estimates, it no longer provides an earnings per share estimate, suggesting that the market is now more focused on revenues after the latest results.

There's been no real change to the consensus price target of R$1.50, with Méliuz seemingly executing in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Méliuz analyst has a price target of R$1.70 per share, while the most pessimistic values it at R$1.30. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Méliuz'shistorical trends, as the 40% annualised revenue growth to the end of 2023 is roughly in line with the 42% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.3% annually. So although Méliuz is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The clear low-light was that the analysts cut their forecast revenue estimates for Méliuz next year. They also downgraded their revenue estimates, although industry data suggests that Méliuz's revenues are expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at R$1.50, with the latest estimates not enough to have an impact on their price targets.

At least one of Méliuz's five analysts has provided estimates out to 2024, which can be seen for free on our platform here.

You still need to take note of risks, for example - Méliuz has 2 warning signs we think you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether Méliuz is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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