Earnings Report: INTERSHOP Communications Aktiengesellschaft Missed Revenue Estimates By 14%

INTERSHOP Communications Aktiengesellschaft (ETR:ISHA) shareholders are probably feeling a little disappointed, since its shares fell 4.9% to €3.32 in the week after its latest second-quarter results. Revenues were €9.3m, 14% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of €0.06 being in line with what the analysts forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for INTERSHOP Communications

Following the latest results, INTERSHOP Communications' two analysts are now forecasting revenues of €39.4m in 2022. This would be a decent 8.6% improvement in sales compared to the last 12 months. INTERSHOP Communications is also expected to turn profitable, with statutory earnings of €0.03 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €39.7m and earnings per share (EPS) of €0.026 in 2022. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target fell 6.0% to €5.50, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that INTERSHOP Communications' rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 0.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect INTERSHOP Communications to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around INTERSHOP Communications' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of INTERSHOP Communications' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on INTERSHOP Communications. Long-term earnings power is much more important than next year's profits. We have analyst estimates for INTERSHOP Communications going out as far as 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with INTERSHOP Communications , and understanding this should be part of your investment process.

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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.