Frequentis AG (ETR:FQT) Exceeded Expectations And The Analyst Consensus Has Been Reviewing Its Models

Frequentis AG (ETR:FQT) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 11% higher than the analysts had forecast, at €399m, while EPS of €1.41 beat analyst models by 11%. 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.

View our latest analysis for Frequentis

Following the latest results, Frequentis' twin analysts are now forecasting revenues of €417.0m in 2023. This would be an okay 4.5% improvement in sales compared to the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of €378.7m and earnings per share (EPS) of €1.41 in 2023. What's really interesting is that while the consensus made a decent improvement in revenue estimates, it no longer provides an earnings per share estimate, suggesting that - following the latest results - revenues are now the focus of the business.

The average price target fell 5.7% to €30.74, withthe analysts clearly having become less optimistic about Frequentis'prospects following its latest earnings.

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. We would highlight that Frequentis' revenue growth is expected to slow, with the forecast 4.5% annualised growth rate until the end of 2023 being well below the historical 6.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Frequentis is also expected to grow slower than other industry participants.

The Bottom Line

The highlight for us was that the analysts increased their revenue forecasts for Frequentis next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower 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 Frequentis' future valuation.

We have estimates for Frequentis from its twin analysts out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Frequentis that we have uncovered.

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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.