Analyst Forecasts Just Became More Bearish On Wirtualna Polska Holding S.A. (WSE:WPL)

One thing we could say about the analysts on Wirtualna Polska Holding S.A. (WSE:WPL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Wirtualna Polska Holding from its three analysts is for revenues of zł687m in 2021 which, if met, would be a solid 8.6% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 37% to zł3.71. Previously, the analysts had been modelling revenues of zł772m and earnings per share (EPS) of zł3.89 in 2021. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

View our latest analysis for Wirtualna Polska Holding

Despite the cuts to forecast earnings, there was no real change to the zł90.99 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Wirtualna Polska Holding, with the most bullish analyst valuing it at zł114 and the most bearish at zł80.00 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. We would highlight that Wirtualna Polska Holding's revenue growth is expected to slow, with the forecast 8.6% annualised growth rate until the end of 2021 being well below the historical 14% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Wirtualna Polska Holding.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Wirtualna Polska Holding. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Wirtualna Polska Holding's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Wirtualna Polska Holding after today.

Worse, Wirtualna Polska Holding is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.

We also provide an overview of the Wirtualna Polska Holding Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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