Revenue Beat: Mensch und Maschine Software SE Beat Analyst Estimates By 5.5%

Last week saw the newest second-quarter earnings release from Mensch und Maschine Software SE (ETR:MUM), an important milestone in the company's journey to build a stronger business. Results overall were respectable, with statutory earnings of €1.55 per share roughly in line with what the analysts had forecast. Revenues of €71m came in 5.5% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Mensch und Maschine Software

Taking into account the latest results, the four analysts covering Mensch und Maschine Software provided consensus estimates of €328.3m revenue in 2023, which would reflect a perceptible 2.9% decline over the past 12 months. Statutory earnings per share are predicted to accumulate 4.6% to €1.76. In the lead-up to this report, the analysts had been modelling revenues of €330.8m and earnings per share (EPS) of €1.71 in 2023. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of €65.03, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. Currently, the most bullish analyst values Mensch und Maschine Software at €69.50 per share, while the most bearish prices it at €62.00. This is a very narrow spread of estimates, implying either that Mensch und Maschine Software is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We would highlight that revenue is expected to reverse, with a forecast 5.8% annualised decline to the end of 2023. That is a notable change from historical growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Mensch und Maschine Software is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Mensch und Maschine Software following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at €65.03, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Mensch und Maschine Software 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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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.