PharmaSGP Holding SE Just Beat Revenue Estimates By 25%

By
Simply Wall St
Published
December 02, 2021
XTRA:PSG
Source: Shutterstock

It's been a good week for PharmaSGP Holding SE (ETR:PSG) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.4% to €25.20. Sales of €20m came in a notable 25% ahead of expectations, while statutory earnings of €0.89 were in line with what the analysts had been forecasting. 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.

See our latest analysis for PharmaSGP Holding

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XTRA:PSG Earnings and Revenue Growth December 3rd 2021

Following the latest results, PharmaSGP Holding's twin analysts are now forecasting revenues of €76.3m in 2022. This would be a huge 22% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to ascend 12% to €0.79. Yet prior to the latest earnings, the analysts had been anticipated revenues of €74.8m and earnings per share (EPS) of €1.03 in 2022. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

Curiously, the consensus price target rose 6.2% to €34.50. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that PharmaSGP Holding is forecast to grow faster in the future than it has in the past, with revenues expected to display 17% annualised growth until the end of 2022. If achieved, this would be a much better result than the 1.4% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.1% annually. Not only are PharmaSGP Holding's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for PharmaSGP Holding (1 makes us a bit uncomfortable!) that you need to be mindful of.

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