Selvita S.A. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Selvita S.A. (WSE:SLV) had a good week, as its shares rose 6.9% to close at zł66.70 following the release of its annual results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at zł352m, statutory earnings beat expectations by a notable 567%, coming in at zł3.80 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Selvita

Taking into account the latest results, the most recent consensus for Selvita from four analysts is for revenues of zł426.0m in 2024. If met, it would imply a sizeable 21% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to tumble 53% to zł1.78 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of zł424.5m and earnings per share (EPS) of zł2.29 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The consensus price target held steady at zł71.58, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Selvita, with the most bullish analyst valuing it at zł78.70 and the most bearish at zł65.00 per share. 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 21% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% annually. 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 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. 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. The consensus price target held steady at zł71.58, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Selvita. Long-term earnings power is much more important than next year's profits. We have forecasts for Selvita going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Selvita's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.