1&1 AG Just Missed EPS By 7.1%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for 1&1 AG (ETR:1U1), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. 1&1 missed analyst forecasts, with revenues of €1.0b and statutory earnings per share (EPS) of €0.47, falling short by 2.6% and 7.1% respectively. 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.

View our latest analysis for 1&1

After the latest results, the 13 analysts covering 1&1 are now predicting revenues of €4.20b in 2024. If met, this would reflect a modest 2.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 5.8% to €1.82. Before this earnings report, the analysts had been forecasting revenues of €4.20b and earnings per share (EPS) of €1.81 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of €20.89, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values 1&1 at €32.00 per share, while the most bearish prices it at €10.20. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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 analysts are definitely expecting 1&1's growth to accelerate, with the forecast 3.4% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 0.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that 1&1 is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. 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 forecasts for 1&1 going out to 2026, and you can see them free on our platform here.

Even so, be aware that 1&1 is showing 1 warning sign in our investment analysis , you should know about...

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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.