It's been a good week for Selvita S.A. (WSE:SLV) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.9% to zł71.50. Revenues came in 7.1% below expectations, at zł77m. Statutory earnings per share were relatively better off, with a per-share profit of zł3.80 being roughly in line with analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Selvita
Following the latest results, Selvita's five analysts are now forecasting revenues of zł391.6m in 2024. This would be a solid 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 6.8% to zł3.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of zł391.5m and earnings per share (EPS) of zł2.29 in 2024. Although the revenue estimates have not really changed, we can see there's been a great increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of zł68.98, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Selvita analyst has a price target of zł78.70 per share, while the most pessimistic values it at zł62.70. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Selvita's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 22% growth on an annualised basis. This is compared to a historical growth rate of 34% 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) 11% per year. Even after the forecast slowdown in growth, it seems obvious that Selvita is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Selvita following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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. At Simply Wall St, we have a full range of analyst estimates for Selvita going out to 2026, and you can see them free on our platform here..
You can also see whether Selvita is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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.
About WSE:SLV
Very undervalued with solid track record.
