Adevinta ASA Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

Adevinta ASA (OB:ADE) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Things were not great overall, with a surprise (statutory) loss of €0.039 per share on revenues of €408m, even though the analysts had been expecting a profit. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Our analysis indicates that ADE is potentially undervalued!

Taking into account the latest results, the current consensus from Adevinta's 20 analysts is for revenues of €1.83b in 2023, which would reflect a meaningful 15% increase on its sales over the past 12 months. Per-share earnings are expected to surge 376% to €0.20. Before this earnings report, the analysts had been forecasting revenues of €1.83b and earnings per share (EPS) of €0.21 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr92.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Adevinta at kr120 per share, while the most bearish prices it at kr64.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's pretty clear that there is an expectation that Adevinta's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% annually. So it's pretty clear that, while Adevinta's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Adevinta analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Adevinta that you need to be mindful 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.