Westwing Group SE (ETR:WEW) Just Reported Earnings, And Analysts Cut Their Target Price

Westwing Group SE (ETR:WEW) shareholders are probably feeling a little disappointed, since its shares fell 4.4% to €7.59 in the week after its latest annual results. It was an okay report, and revenues came in at €431m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Westwing Group

Taking into account the latest results, Westwing Group's three analysts currently expect revenues in 2023 to be €429.0m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 36% to €1.00. Before this latest report, the consensus had been expecting revenues of €439.5m and €0.79 per share in losses. So it's pretty clear the analysts have mixed opinions on Westwing Group after this update; revenues were downgraded and per-share losses expected to increase.

The consensus price target fell 9.6% to €9.83, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. There are some variant perceptions on Westwing Group, with the most bullish analyst valuing it at €13.50 and the most bearish at €8.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Westwing Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 0.4% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 19% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.1% annually for the foreseeable future. It's pretty clear that Westwing Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Westwing Group. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Westwing Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Westwing Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Westwing Group going out to 2025, and you can see them free on our platform here..

We also provide an overview of the Westwing Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.