Geox S.p.A. (BIT:GEO) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Geox S.p.A. (BIT:GEO) had a good week, as its shares rose 3.9% to close at €0.83 following the release of its annual results. It was an okay result overall, with revenues coming in at €535m, roughly what the analysts had been expecting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Geox after the latest results.

Check out our latest analysis for Geox

Taking into account the latest results, the current consensus from Geox's twin analysts is for revenues of €620.0m in 2021, which would reflect a decent 16% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 69% to €0.12. Before this latest report, the consensus had been expecting revenues of €619.1m and €0.11 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although sales forecasts held steady, the consensus also made a moderate increase in its losses per share forecasts.

Despite expectations of heavier losses next year,the analysts have lifted their price target 14% to €0.80, perhaps implying these losses are not expected to be recurring over the long term.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Geox is forecast to grow faster in the future than it has in the past, with revenues expected to display 16% annualised growth until the end of 2021. If achieved, this would be a much better result than the 6.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 12% annually. Not only are Geox's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Geox. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Geox going out as far as 2022, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Geox , and understanding this should be part of your investment process.

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This article by Simply Wall St is general in nature. 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.
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