Earnings Report: PVA TePla AG Missed Revenue Estimates By 17%

PVA TePla AG (ETR:TPE) came out with its quarterly 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 were €24m, 17% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of €0.59 being in line with what the analysts anticipated. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 PVA TePla

Taking into account the latest results, the current consensus from PVA TePla's seven analysts is for revenues of €142.6m in 2021, which would reflect an okay 6.1% increase on its sales over the past 12 months. Statutory earnings per share are forecast to dive 24% to €0.45 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €145.2m and earnings per share (EPS) of €0.47 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 7.0% to €30.71, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on PVA TePla, with the most bullish analyst valuing it at €35.00 and the most bearish at €27.00 per share. This is a very narrow spread of estimates, implying either that PVA TePla is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PVA TePla's past performance and to peers in the same industry. We would highlight that PVA TePla's revenue growth is expected to slow, with the forecast 8.2% annualised growth rate until the end of 2021 being well below the historical 13% p.a. growth over the last five years. Compare this to the 16 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.3% per year. So it's pretty clear that, while PVA TePla's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for PVA TePla. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. We have forecasts for PVA TePla going out to 2025, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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