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Aroundtown SA Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a sad week for Aroundtown SA (ETR:AT1), who've watched their investment drop 11% to €1.31 in the week since the company reported its full-year result. Revenues of €1.6b beat expectations by 7.5%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of €0.58 compared to previous analyst expectations of a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Aroundtown

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earnings-and-revenue-growth

Taking into account the latest results, the current consensus, from the eight analysts covering Aroundtown, is for revenues of €1.58b in 2023, which would reflect a discernible 2.1% reduction in Aroundtown's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 22% to €0.46. Before this latest report, the consensus had been expecting revenues of €1.48b and €0.44 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although there was a nice uplift to revenue, the consensus also made a pronounced increase to its losses per share forecasts.

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There was no major change to the consensus price target of €3.10, with growing revenues seemingly enough to offset the concern of growing losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Aroundtown analyst has a price target of €7.70 per share, while the most pessimistic values it at €1.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.1% by the end of 2023. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 32% annually for the foreseeable future. So it's pretty clear that Aroundtown's revenues are expected to shrink slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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. We have estimates - from multiple Aroundtown analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Aroundtown is showing 3 warning signs in our investment analysis , and 2 of those are concerning...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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