Results: Orsero S.p.A. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a pretty great week for Orsero S.p.A. (BIT:ORS) shareholders, with its shares surging 12% to €7.44 in the week since its latest yearly results. It looks like a credible result overall - although revenues of €1.0b were in line with what the analysts predicted, Orsero surprised by delivering a statutory profit of €0.71 per share, a notable 17% above expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Orsero

Taking into account the latest results, Orsero's three analysts currently expect revenues in 2021 to be €1.06b, approximately in line with the last 12 months. Statutory per share are forecast to be €0.77, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of €1.07b and earnings per share (EPS) of €0.76 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 29% to €10.77. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. Currently, the most bullish analyst values Orsero at €10.80 per share, while the most bearish prices it at €8.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's pretty clear that there is an expectation that Orsero's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 2.0% growth on an annualised basis. This is compared to a historical growth rate of 6.8% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.6% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Orsero.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Orsero's revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Orsero analysts - going out to 2023, and you can see them free on our platform here.

You still need to take note of risks, for example - Orsero has 3 warning signs we think you should be aware of.

If you decide to trade Orsero, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.