ERG S.p.A. Recorded A 5.5% Miss On Revenue: Analysts Are Revisiting Their Models

As you might know, ERG S.p.A. (BIT:ERG) recently reported its second-quarter numbers. Results look mixed - while revenue fell marginally short of analyst estimates at €172m, statutory earnings were in line with expectations, at €1.28 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the seven analysts covering ERG are now predicting revenues of €836.0m in 2025. If met, this would reflect a solid 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 44% to €1.35. Before this earnings report, the analysts had been forecasting revenues of €832.8m and earnings per share (EPS) of €1.41 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

See our latest analysis for ERG

The consensus price target held steady at €22.14, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 ERG at €29.40 per share, while the most bearish prices it at €19.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that ERG's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 30% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 4.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.1% per year. Not only are ERG'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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ERG. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at €22.14, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for ERG going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for ERG (1 is significant!) that we have uncovered.

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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.