Earnings Release: Here's Why Analysts Cut Their Dovre Group Plc (HEL:DOV1V) Price Target To €0.50

It's been a good week for Dovre Group Plc (HEL:DOV1V) shareholders, because the company has just released its latest second-quarter results, and the shares gained 4.0% to €0.34. It was a credible result overall, with revenues of €51m and statutory earnings per share of €0.01 both in line with analyst estimates, showing that Dovre Group is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is 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 estimate to see what could be in store for next year.

View our latest analysis for Dovre Group

Taking into account the latest results, the most recent consensus for Dovre Group from sole analyst is for revenues of €201.9m in 2024. If met, it would imply an okay 2.6% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 139% to €0.02. Before this earnings report, the analyst had been forecasting revenues of €200.3m and earnings per share (EPS) of €0.03 in 2024. The analyst seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

It might be a surprise to learn that the consensus price target fell 23% to €0.50, with the analyst clearly linking lower forecast earnings to the performance of the stock price.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Dovre Group's revenue growth is expected to slow, with the forecast 5.2% annualised growth rate until the end of 2024 being well below the historical 24% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.8% annually. So it's pretty clear that, while Dovre Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Dovre Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Dovre Group. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Even so, be aware that Dovre Group is showing 4 warning signs in our investment analysis , and 2 of those are significant...

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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.