Earnings Miss: Aroundtown SA Missed EPS By 5.5% And Analysts Are Revising Their Forecasts

Aroundtown SA (ETR:AT1) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues came in at €1.4b, greatly exceeding expectations even though statutory earnings per share (EPS) of €0.53 missed forecasts by 5.5%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Aroundtown

Taking into account the latest results, the nine analysts covering Aroundtown provided consensus estimates of €1.08b revenue in 2022, which would reflect a disturbing 24% decline on its sales over the past 12 months. Per-share earnings are expected to soar 35% to €0.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of €1.24b and earnings per share (EPS) of €0.64 in 2022. So there's been a clear change in sentiment after these results, with the analysts making a real cut to revenues and reconfirming their earnings per share estimates.

The consensus has reconfirmed its price target of €7.06, showing that the analysts don't expect weaker sales expectations next year to have a material impact on Aroundtown's market value. 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. Currently, the most bullish analyst values Aroundtown at €8.70 per share, while the most bearish prices it at €5.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Aroundtown shareholders.

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. We would highlight that sales are expected to reverse, with a forecast 24% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 20% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 6.7% per year. The forecasts do look bearish for Aroundtown, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately they also cut their revenue estimates for next year, and forecasts imply the business' revenues are expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at €7.06, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Aroundtown going out to 2024, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Aroundtown (1 doesn't sit too well with us!) that you need to take into consideration.

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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.