Earnings Update: Verimatrix Société anonyme (EPA:VMX) Just Reported And Analysts Are Trimming Their Forecasts

There's been a notable change in appetite for Verimatrix Société anonyme (EPA:VMX) shares in the week since its yearly report, with the stock down 17% to €2.55. It was an okay result overall, with revenues coming in at €100m, roughly what the analysts had been expecting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Verimatrix Société anonyme

Taking into account the latest results, the dual analysts covering Verimatrix Société anonyme provided consensus estimates of €83.2m revenue in 2021, which would reflect a considerable 17% decline on its sales over the past 12 months. Statutory earnings per share are predicted to soar 367% to €0.084. Yet prior to the latest earnings, the analysts had been anticipated revenues of €105.8m and earnings per share (EPS) of €0.16 in 2021. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

The consensus price target fell 11% to US$4.04, with the weaker earnings outlook clearly leading valuation estimates.

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. We would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 158% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. It's pretty clear that Verimatrix Société anonyme's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Verimatrix Société anonyme. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Verimatrix Société anonyme. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Verimatrix Société anonyme going out as far as 2023, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Verimatrix Société anonyme you should be aware of.

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