Earnings Release: Here's Why Analysts Cut Their CompuGroup Medical SE & Co. KGaA (ETR:COP) Price Target To €43.20

CompuGroup Medical SE & Co. KGaA (ETR:COP) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to €27.82 in the week after its latest first-quarter results. Revenues came in 2.1% below expectations, at €285m. Statutory earnings per share were relatively better off, with a per-share profit of €0.88 being roughly in line with analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for CompuGroup Medical SE KGaA

Taking into account the latest results, CompuGroup Medical SE KGaA's ten analysts currently expect revenues in 2024 to be €1.24b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 76% to €1.69. Before this earnings report, the analysts had been forecasting revenues of €1.24b and earnings per share (EPS) of €1.78 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The average price target fell 6.2% to €43.20, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. The most optimistic CompuGroup Medical SE KGaA analyst has a price target of €64.00 per share, while the most pessimistic values it at €31.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that CompuGroup Medical SE KGaA's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.6% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. Factoring in the forecast slowdown in growth, it seems obvious that CompuGroup Medical SE KGaA is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that CompuGroup Medical SE KGaA's revenue is expected to perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on CompuGroup Medical SE KGaA. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple CompuGroup Medical SE KGaA analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for CompuGroup Medical SE KGaA that we have uncovered.

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

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.