Earnings Update: Alfen N.V. (AMS:ALFEN) Just Reported And Analysts Are Boosting Their Estimates

Simply Wall St
February 19, 2022
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Shareholders will be ecstatic, with their stake up 21% over the past week following Alfen N.V.'s (AMS:ALFEN) latest full-year results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 2.5%to hit €250m. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Alfen

ENXTAM:ALFEN Earnings and Revenue Growth February 19th 2022

Taking into account the latest results, the most recent consensus for Alfen from three analysts is for revenues of €334.5m in 2022 which, if met, would be a substantial 34% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 45% to €1.44. Before this earnings report, the analysts had been forecasting revenues of €305.8m and earnings per share (EPS) of €1.24 in 2022. So it seems there's been a definite increase in optimism about Alfen's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of €90.75, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Alfen, with the most bullish analyst valuing it at €105 and the most bearish at €77.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Alfen's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 28% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Alfen to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Alfen's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Alfen. Long-term earnings power is much more important than next year's profits. We have forecasts for Alfen going out to 2024, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Alfen (1 is significant!) that you should be aware of.

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