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

As you might know, Brisanet Participações S.A. (BVMF:BRIT3) last week released its latest first-quarter, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at R$217m, statutory earnings missed forecasts by 15%, coming in at just R$0.02 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Brisanet Participações

After the latest results, the five analysts covering Brisanet Participações are now predicting revenues of R$1.03b in 2022. If met, this would reflect a substantial 41% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 2,552% to R$0.13. Before this earnings report, the analysts had been forecasting revenues of R$1.04b and earnings per share (EPS) of R$0.21 in 2022. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 26% to R$8.53, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Brisanet Participações analyst has a price target of R$17.00 per share, while the most pessimistic values it at R$4.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 Brisanet Participações'historical trends, as the 58% annualised revenue growth to the end of 2022 is roughly in line with the 54% annual revenue growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.2% annually. So although Brisanet Participações 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 Brisanet Participações. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Brisanet Participações going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Brisanet Participações 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.