Market forces rained on the parade of Erlebnis Akademie AG (FRA:EAD) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, Erlebnis Akademie’s lone analyst currently expects revenues in 2023 to be €24m, approximately in line with the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 61% to €0.13. Prior to this update, the analyst had been forecasting revenues of €27m and earnings per share (EPS) of €0.27 in 2023. There looks to have been a major change in sentiment regarding Erlebnis Akademie’s prospects, with a measurable cut to revenues and the analyst now forecasting a loss instead of a profit.
See our latest analysis for Erlebnis Akademie
The consensus price target fell 13% to €18.70, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Erlebnis Akademie’s past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.0% by the end of 2023. This indicates a significant reduction from annual growth of 12% 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 9.9% per year. It’s pretty clear that Erlebnis Akademie’s revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Erlebnis Akademie dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from the analyst, we’d understand if readers now felt a bit wary of Erlebnis Akademie.
That said, this broker might have good reason to be negative on Erlebnis Akademie, given dilutive stock issuance over the past year. Learn more, and discover the 2 other concerns we’ve identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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