Results: CENIT Aktiengesellschaft Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a good week for CENIT Aktiengesellschaft (ETR:CSH) shareholders, because the company has just released its latest yearly results, and the shares gained 5.6% to €13.15. Revenues disappointed slightly, as sales of €146m were 4.9% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of €0.51 coming in 16% above what was 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for CENIT

After the latest results, the three analysts covering CENIT are now predicting revenues of €151.8m in 2022. If met, this would reflect a modest 3.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 24% to €0.63. Before this earnings report, the analysts had been forecasting revenues of €162.2m and earnings per share (EPS) of €0.65 in 2022. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the €17.77 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on CENIT, with the most bullish analyst valuing it at €18.80 and the most bearish at €17.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that CENIT's rate of growth is expected to accelerate meaningfully, with the forecast 3.9% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 1.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 8.1% annually. So it's clear that despite the acceleration in growth, CENIT is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CENIT. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple CENIT analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for CENIT that you need to be mindful of.

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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.