Stock Analysis

V-ZUG Holding AG Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

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V-ZUG Holding AG (VTX:VZUG) shareholders are probably feeling a little disappointed, since its shares fell 9.3% to CHF83.70 in the week after its latest annual results. Statutory earnings per share fell badly short of expectations, coming in at CHF1.23, some 55% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CHF647m. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for V-ZUG Holding

SWX:VZUG Earnings and Revenue Growth March 18th 2023

Taking into account the latest results, the current consensus from V-ZUG Holding's three analysts is for revenues of CHF664.7m in 2023, which would reflect a credible 2.8% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 365% to CHF5.75. Before this earnings report, the analysts had been forecasting revenues of CHF661.4m and earnings per share (EPS) of CHF6.35 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at CHF103, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 V-ZUG Holding, with the most bullish analyst valuing it at CHF111 and the most bearish at CHF95.00 per share. This is a very narrow spread of estimates, implying either that V-ZUG Holding is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that V-ZUG Holding's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 2.8% growth on an annualised basis. This is compared to a historical growth rate of 4.7% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.9% per year. Even after the forecast slowdown in growth, it seems obvious that V-ZUG Holding is also expected to grow faster 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 reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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.

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. We have forecasts for V-ZUG Holding going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for V-ZUG Holding you should know about.

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Find out whether V-ZUG Holding is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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