One Analyst Thinks Erlebnis Akademie AG's (FRA:EAD) Revenues Are Under Threat

The latest analyst coverage could presage a bad day for Erlebnis Akademie AG (FRA:EAD), 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) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from single analyst covering Erlebnis Akademie is for revenues of €25m in 2024, implying a painful 99% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 99% to €0.29 per share. Before this latest update, the analyst had been forecasting revenues of €30m and earnings per share (EPS) of €0.51 in 2024. So we can see that the consensus has become notably more bearish on Erlebnis Akademie's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for Erlebnis Akademie

The consensus price target fell 32% to €12.60, implicitly signalling that lower earnings per share are a leading indicator for Erlebnis Akademie'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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 99% by the end of 2024. This indicates a significant reduction from annual growth of 85% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.6% per year. It's pretty clear that Erlebnis Akademie's revenues are expected to perform substantially worse 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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2026, which can be seen 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 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.