Earnings Beat: Hexaom S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Shareholders of Hexaom S.A. (EPA:ALHEX) will be pleased this week, given that the stock price is up 11% to €21.20 following its latest full-year results. It looks like a credible result overall - although revenues of €1.0b were what the analysts expected, Hexaom surprised by delivering a (statutory) profit of €4.79 per share, an impressive 34% above what was forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Hexaom

After the latest results, the consensus from Hexaom's four analysts is for revenues of €772.3m in 2024, which would reflect a disturbing 25% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to crater 34% to €3.26 in the same period. Before this earnings report, the analysts had been forecasting revenues of €784.8m and earnings per share (EPS) of €2.63 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the sizeable expansion in earnings per share expectations following these results.

The consensus price target rose 6.8% to €25.70, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hexaom, with the most bullish analyst valuing it at €34.00 and the most bearish at €15.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hexaom's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 25% annualised decline to the end of 2024. That is a notable change from historical growth of 6.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% per year. It's pretty clear that Hexaom's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hexaom's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Hexaom going out to 2025, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Hexaom that you should be aware of.

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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.