Results: Worldline SA Delivered A Surprise Loss And Now Analysts Have New Forecasts

It's been a pretty great week for Worldline SA (EPA:WLN) shareholders, with its shares surging 10% to €10.97 in the week since its latest yearly results. Things were not great overall, with a surprise (statutory) loss of €2.90 per share on revenues of €4.6b, even though the analysts had been expecting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Worldline

Taking into account the latest results, the most recent consensus for Worldline from 17 analysts is for revenues of €4.75b in 2024. If met, it would imply a satisfactory 2.9% increase on its revenue over the past 12 months. Earnings are expected to improve, with Worldline forecast to report a statutory profit of €0.52 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €4.74b and earnings per share (EPS) of €0.55 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at €14.54, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Worldline analyst has a price target of €28.90 per share, while the most pessimistic values it at €9.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

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. It's pretty clear that there is an expectation that Worldline's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.9% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% per year. Factoring in the forecast slowdown in growth, it seems obvious that Worldline is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Worldline. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Worldline's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Worldline. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Worldline 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 Worldline that you need to take into consideration.

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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.