Bearish: Analysts Just Cut Their Enapter AG (FRA:H2O) Revenue and EPS estimates

The latest analyst coverage could presage a bad day for Enapter AG (FRA:H2O), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

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Following the downgrade, the latest consensus from Enapter's three analysts is for revenues of €26m in 2025, which would reflect a modest 4.2% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 15% per share from last year to €0.61. Yet before this consensus update, the analysts had been forecasting revenues of €40m and losses of €0.42 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Enapter

The consensus price target fell 44% to €3.43, implicitly signalling that lower earnings per share are a leading indicator for Enapter's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Enapter's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 30% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Enapter.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Enapter. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Enapter.

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 Enapter analysts - going out to 2027, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.