Downgrade: What You Need To Know About The Latest Erlebnis Akademie AG (FRA:EAD) Forecasts

One thing we could say about the covering analyst on Erlebnis Akademie AG (FRA:EAD) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the downgrade, the most recent consensus for Erlebnis Akademie from its sole analyst is for revenues of €23m in 2022 which, if met, would be a decent 18% increase on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analyst forecasting losses of €0.07 per share in 2022. Before this latest update, the analyst had been forecasting revenues of €27m and earnings per share (EPS) of €0.92 in 2022. There looks to have been a major change in sentiment regarding Erlebnis Akademie's prospects, with a substantial drop in revenues and the analyst now forecasting a loss instead of a profit.

View our latest analysis for Erlebnis Akademie

The consensus price target fell 25% to €20.30, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Erlebnis Akademie's past performance and to peers in the same industry. The analyst is definitely expecting Erlebnis Akademie's growth to accelerate, with the forecast 18% annualised growth to the end of 2022 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 25% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Erlebnis Akademie is expected to grow slower than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Erlebnis Akademie dropped from profits to a loss this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Erlebnis Akademie'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 Erlebnis Akademie.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Erlebnis Akademie, including dilutive stock issuance over the past year. Learn more, and discover the 2 other risks we've identified, for 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 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.