Frequentis AG Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Frequentis AG (ETR:FQT) released its annual result to the market. The early response was not positive, with shares down 3.3% to €26.60 in the past week. Frequentis beat revenue expectations by 3.7%, at €432m. Statutory earnings per share (EPS) came in at €1.39, some 6.1% short of analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Frequentis after the latest results.

View our latest analysis for Frequentis

Taking into account the latest results, the consensus forecast from Frequentis' two analysts is for revenues of €440.3m in 2024. This reflects a reasonable 2.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 10% to €1.53. In the lead-up to this report, the analysts had been modelling revenues of €441.3m and earnings per share (EPS) of €1.69 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at €33.23, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Frequentis' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Frequentis' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.0% growth on an annualised basis. This is compared to a historical growth rate of 8.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Frequentis.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Frequentis. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Frequentis' revenue is expected to perform worse than the wider industry. The consensus price target held steady at €33.23, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You can also see our analysis of Frequentis' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.