Companhia de Saneamento Básico do Estado de São Paulo - SABESP Just Beat Revenue Estimates By 15%

A week ago, Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. Companhia de Saneamento Básico do Estado de São Paulo - SABESP beat expectations, with revenue hitting R$36b (15% ahead of estimates) and EPS reaching R$14.02 (a 3.3% beat). 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the eight analysts covering Companhia de Saneamento Básico do Estado de São Paulo - SABESP provided consensus estimates of R$29.6b revenue in 2025, which would reflect an uncomfortable 18% decline over the past 12 months. Statutory earnings per share are expected to plummet 54% to R$6.39 in the same period. In the lead-up to this report, the analysts had been modelling revenues of R$28.2b and earnings per share (EPS) of R$6.74 in 2025. So it's pretty clear consensus is mixed on Companhia de Saneamento Básico do Estado de São Paulo - SABESP after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

See our latest analysis for Companhia de Saneamento Básico do Estado de São Paulo - SABESP

There's been no major changes to the price target of R$124, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' 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. There are some variant perceptions on Companhia de Saneamento Básico do Estado de São Paulo - SABESP, with the most bullish analyst valuing it at R$143 and the most bearish at R$101 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Companhia de Saneamento Básico do Estado de São Paulo - SABESP's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 18% annualised decline to the end of 2025. That is a notable change from historical growth of 13% 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 0.4% per year. It's pretty clear that Companhia de Saneamento Básico do Estado de São Paulo - SABESP's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at R$124, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Companhia de Saneamento Básico do Estado de São Paulo - SABESP going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Companhia de Saneamento Básico do Estado de São Paulo - SABESP (1 is a bit unpleasant!) that you need to take into consideration.

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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.