Results: Paion AG Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for Paion AG (ETR:PA8) shareholders, because the company has just released its latest annual results, and the shares gained 7.8% to €2.09. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at €20m, statutory earnings beat expectations by a notable 12%, coming in at €0.03 per share. 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.

View our latest analysis for Paion

After the latest results, the consensus from Paion's twin analysts is for revenues of €11.7m in 2021, which would reflect a painful 40% decline in sales compared to the last year of performance. The company is forecast to report a statutory loss of €0.32 in 2021, a sharp decline from a profit over the last year. Before this earnings announcement, the analysts had been modelling revenues of €13.0m and losses of €0.22 per share in 2021. So it's pretty clear the analysts have mixed opinions on Paion after this update; revenues were downgraded and per-share losses expected to increase.

The average price target was broadly unchanged at €4.83, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 40% by the end of 2021. This indicates a significant reduction from annual growth of 41% 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 26% per year. It's pretty clear that Paion's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €4.83, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Paion you should be aware of, and 1 of them doesn't sit too well with us.

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