Need To Know: Analysts Just Made A Substantial Cut To Their ABOUT YOU Holding AG (FRA:YOU) Estimates

One thing we could say about the analysts on ABOUT YOU Holding AG (FRA:YOU) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from ABOUT YOU Holding's nine analysts is for revenues of €1.9b in 2023, which would reflect an okay 7.2% improvement in sales compared to the last 12 months. Losses are expected to increase slightly, to €0.91 per share. However, before this estimates update, the consensus had been expecting revenues of €2.2b and €0.73 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for ABOUT YOU Holding

The consensus price target fell 15% to €11.17, implicitly signalling that lower earnings per share are a leading indicator for ABOUT YOU Holding's valuation. 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 ABOUT YOU Holding, with the most bullish analyst valuing it at €22.00 and the most bearish at €5.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that ABOUT YOU Holding's revenue growth is expected to slow, with the forecast 9.8% annualised growth rate until the end of 2023 being well below the historical 36% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ABOUT YOU Holding.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of ABOUT YOU Holding.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple ABOUT YOU Holding analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.