Lottomatica Group S.p.A. Just Missed EPS: Here's What Analysts Think Will Happen Next

Last week saw the newest annual earnings release from Lottomatica Group S.p.A. ( BIT:LTMC ), an important milestone in the company's journey to build a stronger business. Statutory earnings per share fell badly short of expectations, coming in at €0.29, some 40% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €1.7b.

Although the statutory earnings per share fell well short of expectations, we have to consider that Lottomatica incurred extra costs throughout the IPO process, which heavily skews this figure. If we use an adjusted earnings per share figure that is more representative of the company's underlying performance without these extra costs, we see earnings per share jump up to €0.92 per share, falling just shy of 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Lottomatica Group

Taking into account the latest results, the most recent consensus for Lottomatica Group from eight analysts is for revenues of €1.85b in 2024. If met, it would imply a meaningful 12% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 181% to €0.76. Yet prior to the latest earnings, the analysts had been anticipated revenues of €1.80b and earnings per share (EPS) of €0.83 in 2024. So it's pretty clear consensus is mixed on Lottomatica Group after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

The consensus price target was unchanged at €14.06, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Lottomatica Group at €16.00 per share, while the most bearish prices it at €12.50. 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 Lottomatica Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 40% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.8% per year. So it's pretty clear that, while Lottomatica Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lottomatica Group. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at €14.06, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Lottomatica Group going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Lottomatica Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here .

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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.