The Consensus EPS Estimates For H2APEX Group SCA (ETR:H2A) Just Fell Dramatically

Today is shaping up negative for H2APEX Group SCA (ETR:H2A) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the most recent consensus for H2APEX Group from its three analysts is for revenues of €35m in 2024 which, if met, would be a decent 11% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 24% to €0.62 per share. However, before this estimates update, the consensus had been expecting revenues of €40m and €0.45 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for H2APEX Group

The consensus price target fell 7.6% to €10.17, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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 H2APEX Group's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 433% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. Factoring in the forecast slowdown in growth, it looks like H2APEX Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at H2APEX Group. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of H2APEX Group.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with H2APEX Group, including a short cash runway. For more information, you can click here to discover this and the 1 other concern we've identified.

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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.