TOTVS S.A. (BVMF:TOTS3) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a good week for TOTVS S.A. (BVMF:TOTS3) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.5% to R$38.33. Revenues of R$1.5b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at R$0.33, missing estimates by 3.3%. 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.

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Taking into account the latest results, the consensus forecast from TOTVS' nine analysts is for revenues of R$6.17b in 2025. This reflects a meaningful 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 15% to R$1.51. Before this earnings report, the analysts had been forecasting revenues of R$6.15b and earnings per share (EPS) of R$1.47 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

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There's been no major changes to the consensus price target of R$37.95, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic TOTVS analyst has a price target of R$43.00 per share, while the most pessimistic values it at R$33.00. This is a very narrow spread of estimates, implying either that TOTVS is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 TOTVS'historical trends, as the 18% annualised revenue growth to the end of 2025 is roughly in line with the 18% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 13% annually. So it's pretty clear that TOTVS is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards TOTVS following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.

With that in mind, we wouldn't be too quick to come to a conclusion on TOTVS. 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 TOTVS going out to 2027, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.