Results: RATIONAL Aktiengesellschaft Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week saw the newest first-quarter earnings release from RATIONAL Aktiengesellschaft (ETR:RAA), an important milestone in the company's journey to build a stronger business. The result was positive overall - although revenues of €286m were in line with what the analysts predicted, RATIONAL surprised by delivering a statutory profit of €4.94 per share, modestly greater than expected. 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 RATIONAL after the latest results.

View our latest analysis for RATIONAL

Taking into account the latest results, the current consensus from RATIONAL's twelve analysts is for revenues of €1.20b in 2024. This would reflect a credible 6.5% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 4.2% to €20.18. Before this earnings report, the analysts had been forecasting revenues of €1.20b and earnings per share (EPS) of €20.26 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at €723. 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 RATIONAL at €895 per share, while the most bearish prices it at €560. 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. We can infer from the latest estimates that forecasts expect a continuation of RATIONAL'shistorical trends, as the 8.8% annualised revenue growth to the end of 2024 is roughly in line with the 9.1% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.2% annually. So although RATIONAL is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at €723, 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 Simply Wall St, we have a full range of analyst estimates for RATIONAL going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for RATIONAL you should know about.

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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.