Earnings Beat: flatexDEGIRO AG Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

flatexDEGIRO AG (ETR:FTK) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.4% to hit €256m. flatexDEGIRO reported statutory earnings per share (EPS) €2.18, which was a notable 15% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for flatexDEGIRO

Taking into account the latest results, the most recent consensus for flatexDEGIRO from six analysts is for revenues of €473.2m in 2021 which, if met, would be a huge 85% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 138% to €5.19. Before this earnings report, the analysts had been forecasting revenues of €377.9m and earnings per share (EPS) of €3.71 in 2021. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

It will come as no surprise to learn that the analysts have increased their price target for flatexDEGIRO 11% to €118on the back of these upgrades. 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. There are some variant perceptions on flatexDEGIRO, with the most bullish analyst valuing it at €130 and the most bearish at €110 per share. This is a very narrow spread of estimates, implying either that flatexDEGIRO is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. The analysts are definitely expecting flatexDEGIRO's growth to accelerate, with the forecast 85% annualised growth to the end of 2021 ranking favourably alongside historical growth of 21% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect flatexDEGIRO to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards flatexDEGIRO following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 flatexDEGIRO going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for flatexDEGIRO that you should be aware of.

If you decide to trade flatexDEGIRO, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.