ABOUT YOU Holding AG (FRA:YOU) Just Reported Earnings, And Analysts Cut Their Target Price

Shareholders of ABOUT YOU Holding AG (FRA:YOU) will be pleased this week, given that the stock price is up 15% to €7.77 following its latest first-quarter results. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for ABOUT YOU Holding

After the latest results, the ten analysts covering ABOUT YOU Holding are now predicting revenues of €2.21b in 2023. If met, this would reflect a sizeable 22% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 14% from last year to €0.73. Before this earnings announcement, the analysts had been modelling revenues of €2.21b and losses of €0.64 per share in 2023. So it's pretty clear the analysts have mixed opinions on ABOUT YOU Holding even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase in per-share losses.

The consensus price target fell 11% to €14.62per share, with the analysts clearly concerned by ballooning losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic ABOUT YOU Holding analyst has a price target of €22.00 per share, while the most pessimistic values it at €5.20. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 can infer from the latest estimates that forecasts expect a continuation of ABOUT YOU Holding'shistorical trends, as the 30% annualised revenue growth to the end of 2023 is roughly in line with the 36% annual revenue growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So although ABOUT YOU Holding is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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 ABOUT YOU Holding. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 ABOUT YOU Holding. 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 ABOUT YOU Holding going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for ABOUT YOU Holding that you need to take into consideration.

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.