hGears AG (ETR:HGEA) Just Reported, And Analysts Assigned A €3.13 Price Target

As you might know, hGears AG (ETR:HGEA) recently reported its annual numbers. Revenues were in line with expectations, at €114m, while statutory losses ballooned to €1.33 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for hGears

Following the recent earnings report, the consensus from three analysts covering hGears is for revenues of €106.9m in 2024. This implies a discernible 6.0% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 24% to €1.01. Before this earnings announcement, the analysts had been modelling revenues of €106.7m and losses of €1.01 per share in 2024.

As a result, it's unexpected to see that the consensus price target fell 11% to €3.13, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. 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 hGears at €3.70 per share, while the most bearish prices it at €2.80. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that hGears' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 6.0% to the end of 2024. This tops off a historical decline of 0.8% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.1% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect hGears to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple hGears analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - hGears has 3 warning signs we think you should be aware of.

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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.