Stock Analysis

Results: Infrastrutture Wireless Italiane S.p.A. Beat Earnings Expectations And Analysts Now Have New Forecasts

BIT:INW
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Last week, you might have seen that Infrastrutture Wireless Italiane S.p.A. (BIT:INW) released its full-year result to the market. The early response was not positive, with shares down 4.8% to €8.20 in the past week. Infrastrutture Wireless Italiane reported €663m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €0.18 beat expectations, being 8.8% higher than what the analysts expected. 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. 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 Infrastrutture Wireless Italiane

earnings-and-revenue-growth
BIT:INW Earnings and Revenue Growth March 7th 2021

Taking into account the latest results, the consensus forecast from Infrastrutture Wireless Italiane's 16 analysts is for revenues of €796.1m in 2021, which would reflect a sizeable 20% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to grow 13% to €0.20. In the lead-up to this report, the analysts had been modelling revenues of €796.4m and earnings per share (EPS) of €0.19 in 2021. So the consensus seems to have become somewhat more optimistic on Infrastrutture Wireless Italiane's earnings potential following these results.

The consensus price target was unchanged at €12.08, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Infrastrutture Wireless Italiane at €13.60 per share, while the most bearish prices it at €10.60. This is a very narrow spread of estimates, implying either that Infrastrutture Wireless Italiane is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Infrastrutture Wireless Italiane's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Infrastrutture Wireless Italiane to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Infrastrutture Wireless Italiane following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Infrastrutture Wireless Italiane analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Infrastrutture Wireless Italiane is showing 5 warning signs in our investment analysis , and 2 of those don't sit too well with us...

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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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