Yahoo Finance 1&1 AG Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
It's shaping up to be a tough period for 1&1 AG (ETR:1U1), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 2.6% short of analyst estimates at €1.0b, and statutory earnings of €0.47 per share missed forecasts by 7.1%. 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. 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 1&1
Taking into account the latest results, the most recent consensus for 1&1 from 13 analysts is for revenues of €4.20b in 2024. If met, it would imply a satisfactory 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 5.8% to €1.82. In the lead-up to this report, the analysts had been modelling revenues of €4.20b and earnings per share (EPS) of €1.81 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of €20.89, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic 1&1 analyst has a price target of €32.00 per share, while the most pessimistic values it at €10.20. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that 1&1's rate of growth is expected to accelerate meaningfully, with the forecast 3.4% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 0.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that 1&1 is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on 1&1. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for 1&1 going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for 1&1 that 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.
