TomTom N.V. (AMS:TOM2) Analysts Are Cutting Their Estimates: Here's What You Need To Know

There's been a major selloff in TomTom N.V. (AMS:TOM2) shares in the week since it released its annual report, with the stock down 21% to €4.13. Revenues were in line with expectations, at €574m, while statutory losses ballooned to €0.14 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for TomTom

After the latest results, the consensus from TomTom's dual analysts is for revenues of €554.8m in 2025, which would reflect a noticeable 3.4% decline in revenue compared to the last year of performance. Statutory losses are forecast to balloon 36% to €0.09 per share. Before this earnings report, the analysts had been forecasting revenues of €621.4m and earnings per share (EPS) of €0.19 in 2025. There looks to have been a major change in sentiment regarding TomTom's prospects following the latest results, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

The average price target fell 25% to €6.00, implicitly signalling that lower earnings per share are a leading indicator for TomTom's valuation.

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. Over the past five years, revenues have declined around 0.9% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 3.4% decline in revenue until the end of 2025. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 10% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect TomTom to suffer worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for TomTom dropped from profits to a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for TomTom going out as far as 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for TomTom 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.