Analysts Are Updating Their Mensch und Maschine Software SE (ETR:MUM) Estimates After Its Annual Results
Investors in Mensch und Maschine Software SE (ETR:MUM) had a good week, as its shares rose 4.8% to close at €48.80 following the release of its yearly results. It was an okay report, and revenues came in at €320m, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mensch und Maschine Software after the latest results.
View our latest analysis for Mensch und Maschine Software
Following last week's earnings report, Mensch und Maschine Software's three analysts are forecasting 2023 revenues to be €315.7m, approximately in line with the last 12 months. Statutory earnings per share are predicted to step up 17% to €1.80. Before this earnings report, the analysts had been forecasting revenues of €331.1m and earnings per share (EPS) of €1.78 in 2023. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The average price target was steady at €60.75even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. Currently, the most bullish analyst values Mensch und Maschine Software at €65.00 per share, while the most bearish prices it at €54.00. This is a very narrow spread of estimates, implying either that Mensch und Maschine Software is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 1.5% 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 7.3% per year. It's pretty clear that Mensch und Maschine Software's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €60.75, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Mensch und Maschine Software. 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 Mensch und Maschine Software going out to 2025, and you can see them free on our platform here..
It might also be worth considering whether Mensch und Maschine Software's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.
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