eDreams ODIGEO S.A. (BME:EDR) Just Reported And Analysts Have Been Cutting Their Estimates

The analysts might have been a bit too bullish on eDreams ODIGEO S.A. (BME:EDR), given that the company fell short of expectations when it released its full-year results last week. It was a pretty negative result overall, with revenues of €107m missing analyst predictions by 3.0%. Worse, the business reported a statutory loss of €1.13 per share, much larger than the analysts had forecast prior to the result. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for eDreams ODIGEO

Taking into account the latest results, the consensus forecast from eDreams ODIGEO's five analysts is for revenues of €289.1m in 2022, which would reflect a major 170% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 69% to €0.35. Before this earnings announcement, the analysts had been modelling revenues of €305.1m and losses of €0.19 per share in 2022. So it's pretty clear the analysts have mixed opinions on eDreams ODIGEO after this update; revenues were downgraded and per-share losses expected to increase.

There was no major change to the consensus price target of €3.90, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values eDreams ODIGEO at €4.80 per share, while the most bearish prices it at €3.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await eDreams ODIGEO shareholders.

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. One thing stands out from these estimates, which is that eDreams ODIGEO is forecast to grow faster in the future than it has in the past, with revenues expected to display 170% annualised growth until the end of 2022. If achieved, this would be a much better result than the 7.4% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 17% per year. Not only are eDreams ODIGEO's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at eDreams ODIGEO. They also downgraded their revenue estimates, although industry data suggests that eDreams ODIGEO's revenues are expected to grow faster than the wider industry. The consensus price target held steady at €3.90, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple eDreams ODIGEO analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for eDreams ODIGEO that you need to take into consideration.

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