€58.84: That's What Analysts Think Wavestone SA (EPA:WAVE) Is Worth After Its Latest Results

There's been a notable change in appetite for Wavestone SA (EPA:WAVE) shares in the week since its quarterly report, with the stock down 11% to €40.85. It was a credible result overall, with revenues of €225m and statutory earnings per share of €2.71 both in line with analyst estimates, showing that Wavestone is executing in line with 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Wavestone

Taking into account the latest results, the consensus forecast from Wavestone's four analysts is for revenues of €944.2m in 2025. This reflects a credible 7.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 22% to €3.10. Before this earnings report, the analysts had been forecasting revenues of €959.2m and earnings per share (EPS) of €3.30 in 2025. 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.

It might be a surprise to learn that the consensus price target fell 13% to €58.84, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Wavestone, with the most bullish analyst valuing it at €67.00 and the most bearish at €45.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 can infer from the latest estimates that forecasts expect a continuation of Wavestone'shistorical trends, as the 15% annualised revenue growth to the end of 2025 is roughly in line with the 14% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.0% per year. So although Wavestone is expected to maintain its revenue growth rate, it's definitely 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Wavestone analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Wavestone 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.