Analysts Just Slashed Their Don't Nod Entertainment S.A. (EPA:ALDNE) EPS Numbers

The analysts covering Don't Nod Entertainment S.A. (EPA:ALDNE) 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.

Following the latest downgrade, the current consensus, from the three analysts covering Don't Nod Entertainment, is for revenues of €15m in 2023, which would reflect a sizeable 50% reduction in Don't Nod Entertainment's sales over the past 12 months. Per-share earnings are expected to leap 76% to €0.34. Prior to this update, the analysts had been forecasting revenues of €22m and earnings per share (EPS) of €0.51 in 2023. Indeed, we can see that the analysts are a lot more bearish about Don't Nod Entertainment's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Don't Nod Entertainment

It'll come as no surprise then, to learn that the analysts have cut their price target 6.5% to €17.70.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 50% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 19% 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 1.0% per year. It's pretty clear that Don't Nod Entertainment's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Don't Nod Entertainment. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Don't Nod Entertainment.

That said, the analysts might have good reason to be negative on Don't Nod Entertainment, given major dilution from new stock issuance in the past year. Learn more, and discover the 1 other risk we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.