Allegro.eu SA (WSE:ALE) Just Reported, And Analysts Assigned A zł51.87 Price Target

Shareholders might have noticed that Allegro.eu SA (WSE:ALE) filed its annual result this time last week. The early response was not positive, with shares down 7.8% to zł30.20 in the past week. It looks like the results were a bit of a negative overall. While revenues of zł5.4b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.4% to hit zł1.06 per share. 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.

View our latest analysis for Allegro.eu

Taking into account the latest results, the current consensus from Allegro.eu's 14 analysts is for revenues of zł6.75b in 2022, which would reflect a huge 26% increase on its sales over the past 12 months. Statutory earnings per share are predicted to accumulate 8.0% to zł1.15. Before this earnings report, the analysts had been forecasting revenues of zł6.70b and earnings per share (EPS) of zł1.23 in 2022. 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 8.9% to zł51.87, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Allegro.eu analyst has a price target of zł93.00 per share, while the most pessimistic values it at zł30.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 26% annualised growth rate until the end of 2022 being well below the historical 33% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 22% annually. Factoring in the forecast slowdown in growth, it looks like Allegro.eu is forecast to grow at about the same rate as 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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Allegro.eu's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Allegro.eu going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Allegro.eu has 1 warning sign we think you should be aware 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.