Allegro.eu SA Just Missed EPS By 62%: Here's What Analysts Think Will Happen Next

Investors in Allegro.eu SA (WSE:ALE) had a good week, as its shares rose 5.8% to close at zł33.06 following the release of its annual results. Statutory earnings per share fell badly short of expectations, coming in at zł0.27, some 62% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at zł10b. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Allegro.eu after the latest results.

See our latest analysis for Allegro.eu

Taking into account the latest results, the most recent consensus for Allegro.eu from 15 analysts is for revenues of zł11.3b in 2024. If met, it would imply a meaningful 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 354% to zł1.22. In the lead-up to this report, the analysts had been modelling revenues of zł11.6b and earnings per share (EPS) of zł1.07 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a solid gain to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus has made no major changes to the price target of zł38.58, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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 Allegro.eu analyst has a price target of zł48.00 per share, while the most pessimistic values it at zł33.30. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Allegro.eu's past performance and to peers in the same industry. We would highlight that Allegro.eu's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 33% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.6% per year. Even after the forecast slowdown in growth, it seems obvious that Allegro.eu is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Allegro.eu's earnings potential next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at zł38.58, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Allegro.eu going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Allegro.eu that you need to take into consideration.

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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.