The Consensus EPS Estimates For Ecoslops S.A. (EPA:ALESA) Just Fell A Lot

The analysts covering Ecoslops S.A. (EPA:ALESA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. At €9.00, shares are up 4.9% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the latest consensus from Ecoslops' twin analysts is for revenues of €21m in 2022, which would reflect a huge 65% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 82% to €0.13. Prior to this update, the analysts had been forecasting revenues of €25m and earnings per share (EPS) of €0.42 in 2022. There looks to have been a major change in sentiment regarding Ecoslops' prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.

See our latest analysis for Ecoslops

The consensus price target fell 9.4% to €15.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. The most optimistic Ecoslops analyst has a price target of €19.00 per share, while the most pessimistic values it at €11.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Ecoslops' growth to accelerate, with the forecast 65% annualised growth to the end of 2022 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ecoslops to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Ecoslops to become unprofitable this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Ecoslops.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Ecoslops going out as far as 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.