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

Signify N.V. (AMS:LIGHT) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to €21.86 in the week after its latest annual results. The result was positive overall - although revenues of €6.1b were in line with what the analysts predicted, Signify surprised by delivering a statutory profit of €2.57 per share, modestly greater than 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Signify

After the latest results, the ten analysts covering Signify are now predicting revenues of €6.31b in 2025. If met, this would reflect a modest 2.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.9% to €2.73. In the lead-up to this report, the analysts had been modelling revenues of €6.30b and earnings per share (EPS) of €2.67 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of €29.06, 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. The most optimistic Signify analyst has a price target of €42.00 per share, while the most pessimistic values it at €18.32. 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. The analysts are definitely expecting Signify's growth to accelerate, with the forecast 2.7% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.7% per annum 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 6.8% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Signify is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 Signify analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Signify that you should be aware of.

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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.