Temenos AG (VTX:TEMN) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a sad week for Temenos AG (VTX:TEMN), who've watched their investment drop 15% to CHF57.60 in the week since the company reported its quarterly result. Results look mixed - while revenue fell marginally short of analyst estimates at US$230m, statutory earnings beat expectations 2.4%, with Temenos reporting profits of US$0.44 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Temenos

Taking into account the latest results, the most recent consensus for Temenos from 13 analysts is for revenues of US$1.06b in 2024. If met, it would imply an okay 5.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 12% to US$2.10. In the lead-up to this report, the analysts had been modelling revenues of US$1.07b and earnings per share (EPS) of US$2.20 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at CHF71.99, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Temenos, with the most bullish analyst valuing it at CHF100 and the most bearish at CHF52.85 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The analysts are definitely expecting Temenos' growth to accelerate, with the forecast 7.0% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.9% per year. So it's clear that despite the acceleration in growth, Temenos is expected to grow meaningfully slower than the industry average.

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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Temenos' revenue is expected to perform worse than the wider industry. The consensus price target held steady at CHF71.99, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Temenos 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 2 warning signs with Temenos (at least 1 which is a bit concerning) , and understanding them 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.