GK Software SE Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

GK Software SE (ETR:GKS) just released its yearly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.7% to hit €121m. GK Software reported statutory earnings per share (EPS) €3.00, which was a notable 10% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for GK Software

Taking into account the latest results, the current consensus from GK Software's four analysts is for revenues of €135.5m in 2021, which would reflect a meaningful 12% increase on its sales over the past 12 months. Statutory earnings per share are predicted to shoot up 36% to €4.36. Before this earnings report, the analysts had been forecasting revenues of €138.9m and earnings per share (EPS) of €4.59 in 2021. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The average price target climbed 9.2% to €146despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values GK Software at €170 per share, while the most bearish prices it at €131. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.5% annually. So although GK Software is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for GK Software. They also downgraded their revenue estimates, although industry data suggests that GK Software's revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for GK Software going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with GK Software .

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This article by Simply Wall St is general in nature. 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.
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