One Forecaster Is Now More Bearish On elumeo SE (ETR:ELB) Than They Used To Be

The latest analyst coverage could presage a bad day for elumeo SE (ETR:ELB), with the covering analyst 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 analyst has soured majorly on the business.

Following this downgrade, elumeo's solitary analyst are forecasting 2023 revenues to be €46m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 83% to €0.11. Previously, the analyst had been modelling revenues of €53m and earnings per share (EPS) of €0.22 in 2023. There looks to have been a major change in sentiment regarding elumeo's prospects, with a measurable cut to revenues and the analyst now forecasting a loss instead of a profit.

See our latest analysis for elumeo

The consensus price target fell 16% to €9.00, implicitly signalling that lower earnings per share are a leading indicator for elumeo's valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analyst expects the years of declining sales to come to an end, given the flat revenue forecast out to 2023. That would be a definite improvement, given that the past five years have seen sales shrink 6.0% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% annually. Although elumeo's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst is expecting elumeo to become unprofitable this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that elumeo's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of elumeo.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for elumeo going out as far as 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.