Stock Analysis

PNE AG Just Reported A Surprise Profit And Analysts Updated Their Estimates

XTRA:PNE3
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Shareholders of PNE AG (ETR:PNE3) will be pleased this week, given that the stock price is up 11% to €10.28 following its latest full-year results. Revenues of €122m missed forecasts by 12%, but PNE managed to deliver a surprise (statutory) profit, with earnings per share of €0.33 a decent improvement on the loss that the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on PNE after the latest results.

Check out our latest analysis for PNE

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XTRA:PNE3 Earnings and Revenue Growth April 2nd 2022

Taking into account the latest results, the consensus forecast from PNE's four analysts is for revenues of €128.5m in 2022, which would reflect a modest 5.1% improvement in sales compared to the last 12 months. The company is forecast to report a statutory loss of €0.04 in 2022, a sharp decline from a profit over the last year. Before this earnings announcement, the analysts had been modelling revenues of €127.0m and losses of €0.022 per share in 2022. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

As a result, there was no major change to the consensus price target of €9.13, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic PNE analyst has a price target of €10.00 per share, while the most pessimistic values it at €8.20. This is a very narrow spread of estimates, implying either that PNE is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. One thing stands out from these estimates, which is that PNE is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.1% annualised growth until the end of 2022. If achieved, this would be a much better result than the 17% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.7% annually for the foreseeable future. Although PNE's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at PNE. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that PNE's revenues are expected to perform worse than the wider industry. The consensus price target held steady at €9.13, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PNE going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for PNE you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether PNE is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.