HomeToGo SE (FRA:HTG) Just Reported Half-Year Earnings And Analysts Are Lifting Their Estimates

Investors in HomeToGo SE (FRA:HTG) had a good week, as its shares rose 7.5% to close at €2.71 following the release of its interim results. The results were positive, with revenue coming in at €57m, beating analyst expectations by 2.9%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on HomeToGo after the latest results.

See our latest analysis for HomeToGo

Taking into account the latest results, the current consensus from HomeToGo's three analysts is for revenues of €142.5m in 2022, which would reflect a decent 17% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 69% to €0.38. Before this latest report, the consensus had been expecting revenues of €134.1m and €0.42 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for this year.

The consensus price target fell 23%, to €7.83, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values HomeToGo at €9.00 per share, while the most bearish prices it at €6.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that HomeToGo's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 38% growth on an annualised basis. This is compared to a historical growth rate of 67% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 24% annually. Even after the forecast slowdown in growth, it seems obvious that HomeToGo 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for HomeToGo going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for HomeToGo 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.