Earnings Update: Pierre et Vacances SA (EPA:VAC) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

It's been a pretty great week for Pierre et Vacances SA (EPA:VAC) shareholders, with its shares surging 11% to €7.14 in the week since its latest quarterly results. Revenues were €360m, with Pierre et Vacances reporting some 6.0% below analyst expectations. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Pierre et Vacances

Taking into account the latest results, the current consensus from Pierre et Vacances' four analysts is for revenues of €1.72b in 2022, which would reflect a major 29% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 93% to €1.11. Yet prior to the latest earnings, the analysts had been forecasting revenues of €1.73b and losses of €1.71 per share in 2022. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a considerable decrease in losses per share in particular.

There's been no major changes to the consensus price target of €6.98, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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 Pierre et Vacances, with the most bullish analyst valuing it at €12.00 and the most bearish at €2.40 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. For example, we noticed that Pierre et Vacances' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 67% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 7.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% annually. Not only are Pierre et Vacances' 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 obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at €6.98, 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. At Simply Wall St, we have a full range of analyst estimates for Pierre et Vacances going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for Pierre et Vacances (1 makes us a bit uncomfortable!) 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.