Analysts Have Made A Financial Statement On 1&1 AG's (ETR:1U1) First-Quarter Report

Shareholders might have noticed that 1&1 AG (ETR:1U1) filed its quarterly result this time last week. The early response was not positive, with shares down 2.8% to €15.46 in the past week. Results were roughly in line with estimates, with revenues of €1.0b and statutory earnings per share of €1.20. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Following last week's earnings report, 1&1's ten analysts are forecasting 2025 revenues to be €4.07b, approximately in line with the last 12 months. Statutory per share are forecast to be €1.00, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of €4.08b and earnings per share (EPS) of €1.19 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

View our latest analysis for 1&1

It might be a surprise to learn that the consensus price target was broadly unchanged at €16.75, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values 1&1 at €30.00 per share, while the most bearish prices it at €10.40. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that 1&1's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.4% growth on an annualised basis. This is compared to a historical growth rate of 2.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that 1&1 is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment 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 €16.75, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for 1&1 going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for 1&1 you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.