Earnings Report: Tecan Group AG Missed Revenue Estimates By 8.8%

It's been a sad week for Tecan Group AG (VTX:TECN), who've watched their investment drop 13% to CHF280 in the week since the company reported its half-year result. Results look mixed - while revenue fell marginally short of analyst estimates at CHF467m, statutory earnings were in line with expectations, at CHF10.30 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Tecan Group

Taking into account the latest results, the consensus forecast from Tecan Group's six analysts is for revenues of CHF1.03b in 2024. This reflects a credible 2.6% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be CHF7.79, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CHF1.07b and earnings per share (EPS) of CHF9.98 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 7.6% to CHF356, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Tecan Group analyst has a price target of CHF415 per share, while the most pessimistic values it at CHF300. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Tecan Group shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Tecan Group's revenue growth is expected to slow, with the forecast 5.3% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tecan Group.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tecan Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Tecan Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Tecan Group. 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 Tecan Group going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Tecan Group , and understanding it should be part of your investment process.

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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.