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

It's been a good week for Eneva S.A. (BVMF:ENEV3) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.0% to R$14.55. Revenue came in at R$4.4b, beating expectations by a remarkable 67%, while statutory earnings per share (EPS) were R$0.20, missing estimates by an equally remarkable 42%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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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Taking into account the latest results, the current consensus, from the seven analysts covering Eneva, is for revenues of R$10.4b in 2025. This implies a stressful 25% reduction in Eneva's revenue over the past 12 months. Statutory earnings per share are predicted to jump 297% to R$1.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$8.68b and earnings per share (EPS) of R$0.90 in 2025. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

See our latest analysis for Eneva

Despite these upgrades,the analysts have not made any major changes to their price target of R$15.92, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. There are some variant perceptions on Eneva, with the most bullish analyst valuing it at R$17.30 and the most bearish at R$13.90 per share. This is a very narrow spread of estimates, implying either that Eneva is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 32% by the end of 2025. This indicates a significant reduction from annual growth of 29% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Eneva is expected to lag the wider 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 Eneva following these results. 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 Eneva. Long-term earnings power is much more important than next year's profits. We have forecasts for Eneva going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Eneva (1 is potentially serious!) that you need to be mindful 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.