Temenos AG Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Temenos AG (VTX:TEMN) filed its yearly result this time last week. The early response was not positive, with shares down 5.1% to CHF75.20 in the past week. Revenues were US$1.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$2.43 were also better than expected, beating analyst predictions by 17%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Temenos

Taking into account the latest results, the most recent consensus for Temenos from 14 analysts is for revenues of US$1.07b in 2025. If met, it would imply a satisfactory 2.0% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to reduce 4.7% to US$2.31 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.10b and earnings per share (EPS) of US$2.44 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

What's most unexpected is that the consensus price target rose 5.7% to CHF74.52, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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. Currently, the most bullish analyst values Temenos at CHF89.74 per share, while the most bearish prices it at CHF53.72. 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.

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 Temenos'historical trends, as the 2.0% annualised revenue growth to the end of 2025 is roughly in line with the 2.0% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 11% annually. So it's pretty clear that Temenos is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Temenos. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Temenos going out to 2027, 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 Temenos , 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.