Delivery Hero SE (ETR:DHER) Just Released Its Annual Earnings: Here's What Analysts Think

Delivery Hero SE (ETR:DHER) just released its latest full-year report and things are not looking great. Revenues missed expectations somewhat, coming in at €8.6b, but statutory earnings fell catastrophically short, with a loss of €11.21 some 66% larger than what the analysts had predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Delivery Hero

After the latest results, the 17 analysts covering Delivery Hero are now predicting revenues of €10.3b in 2023. If met, this would reflect a solid 20% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 77% to €2.63. Before this latest report, the consensus had been expecting revenues of €10.8b and €2.84 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers fell somewhat.

The consensus price target was broadly unchanged at €62.60, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Delivery Hero at €94.00 per share, while the most bearish prices it at €30.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Delivery Hero's revenue growth is expected to slow, with the forecast 20% annualised growth rate until the end of 2023 being well below the historical 55% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% annually. Even after the forecast slowdown in growth, it seems obvious that Delivery Hero is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Delivery Hero. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Delivery Hero analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Delivery Hero is showing 2 warning signs in our investment analysis , 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.