Exclusive Networks SA Just Missed EPS By 24%: Here's What Analysts Think Will Happen Next

Exclusive Networks SA (EPA:EXN) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Sales of €3.4b surpassed estimates by 4.9%, although statutory earnings per share missed badly, coming in 24% below expectations at €0.40 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Exclusive Networks after the latest results.

See our latest analysis for Exclusive Networks

Taking into account the latest results, the consensus forecast from Exclusive Networks' six analysts is for revenues of €3.82b in 2023, which would reflect a meaningful 12% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 86% to €0.73. In the lead-up to this report, the analysts had been modelling revenues of €3.63b and earnings per share (EPS) of €0.78 in 2023. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a meaningful to revenue, the consensus also made a small dip in its earnings per share forecasts.

There's been no major changes to the price target of €23.75, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' 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. Currently, the most bullish analyst values Exclusive Networks at €27.50 per share, while the most bearish prices it at €21.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Exclusive Networks is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Exclusive Networks' past performance and to peers in the same industry. We would highlight that Exclusive Networks' revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2023 being well below the historical 17% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.3% annually. Even after the forecast slowdown in growth, it seems obvious that Exclusive Networks is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at €23.75, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Exclusive Networks. Long-term earnings power is much more important than next year's profits. We have forecasts for Exclusive Networks going out to 2025, and you can see them free on our platform here.

You can also see our analysis of Exclusive Networks' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.