Analyst Estimates: Here’s What Brokers Think Of Deezer S.A. (EPA:DEEZR) After Its Full-Year Report
Investors in Deezer S.A. (EPA:DEEZR) had a good week, as its shares rose 5.1% to close at €2.25 following the release of its annual results. It looks like the results were pretty good overall. While revenues of €485m were in line with analyst predictions, statutory losses were much smaller than expected, with Deezer losing €0.47 per share. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Deezer after the latest results.
View our latest analysis for Deezer
After the latest results, the four analysts covering Deezer are now predicting revenues of €550.9m in 2024. If met, this would reflect a meaningful 14% improvement in revenue compared to the last 12 months. Losses are supposed to decline, shrinking 20% from last year to €0.40. Before this earnings announcement, the analysts had been modelling revenues of €560.6m and losses of €0.52 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very promising decrease in losses per share in particular.
There’s been no major changes to the consensus price target of €2.73, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock’s valuation. 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. There are some variant perceptions on Deezer, with the most bullish analyst valuing it at €2.90 and the most bearish at €2.50 per share. This is a very narrow spread of estimates, implying either that Deezer 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. It’s clear from the latest estimates that Deezer’s rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.4% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. Factoring in the forecast acceleration in revenue, it’s pretty clear that Deezer is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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. The consensus price target held steady at €2.73, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Deezer going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we’ve spotted 3 warning signs for Deezer you should be aware of, and 1 of them doesn’t sit too well with us.
Valuation is complex, but we’re helping make it simple.
Find out whether Deezer is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
