Yahoo Finance Fluidra, S.A. Just Missed Earnings And Its EPS Looked Sad - But Analysts Have Updated Their Models
Fluidra, S.A. (BME:FDR) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Sales of €1.4b surpassed estimates by 3.0%, although statutory earnings per share missed badly, coming in 85% below expectations at €0.043 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Fluidra
Taking into account the latest results, Fluidra's seven analysts currently expect revenues in 2020 to be €1.39b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 807% to €0.39. Before this earnings report, the analysts had been forecasting revenues of €1.45b and earnings per share (EPS) of €0.46 in 2020. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The consensus price target fell 5.2% to €12.81, with the weaker earnings outlook clearly leading valuation estimates. 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 Fluidra analyst has a price target of €16.50 per share, while the most pessimistic values it at €10.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 revenue decline of 1.3%, a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Fluidra is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fluidra. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Fluidra. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Fluidra analysts - going out to 2022, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 4 warning signs for Fluidra (1 doesn't sit too well with us!) that you should be aware of.
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