Méliuz S.A. Just Missed Earnings - But Analysts Have Updated Their Models

Méliuz S.A. (BVMF:CASH3) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Statutory earnings per share disappointed, coming in -39% short of expectations, at R$0.08. Fortunately revenue performance was a lot stronger at R$98m arriving 12% ahead of predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Méliuz's three analysts are forecasting 2025 revenues to be R$420.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to sink 12% to R$0.43 in the same period. Before this earnings report, the analysts had been forecasting revenues of R$411.5m and earnings per share (EPS) of R$0.40 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

View our latest analysis for Méliuz

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of R$7.23, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Méliuz, with the most bullish analyst valuing it at R$9.00 and the most bearish at R$6.20 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.8% by the end of 2025. This indicates a significant reduction from annual growth of 18% 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 12% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Méliuz is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Méliuz's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Méliuz. Long-term earnings power is much more important than next year's profits. We have forecasts for Méliuz going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Méliuz has 5 warning signs (and 2 which are concerning) we think 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.