Earnings Beat: Signify N.V. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in Signify N.V. (AMS:LIGHT) had a good week, as its shares rose 9.6% to close at €24.18 following the release of its third-quarter results. It looks like a credible result overall - although revenues of €1.5b were in line with what the analysts predicted, Signify surprised by delivering a statutory profit of €0.84 per share, a notable 18% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Signify

Taking into account the latest results, Signify's twelve analysts currently expect revenues in 2025 to be €6.32b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 24% to €2.64. Before this earnings report, the analysts had been forecasting revenues of €6.36b and earnings per share (EPS) of €2.61 in 2025. 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.

The analysts reconfirmed their price target of €30.31, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Signify at €42.00 per share, while the most bearish prices it at €23.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Signify's revenue growth is expected to slow, with the forecast 1.2% annualised growth rate until the end of 2025 being well below the historical 1.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Signify is also expected to grow slower than other industry participants.

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 that it's tracking in line with expectations. Although our data does suggest that Signify's revenue is expected to perform worse than the wider industry. The consensus price target held steady at €30.31, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Signify. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Signify going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Signify you should know about.

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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.