lastminute.com N.V. (VTX:LMN) Analysts Are Reducing Their Forecasts For This Year

One thing we could say about the analysts on lastminute.com N.V. (VTX:LMN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the two analysts covering lastminute.com provided consensus estimates of €198m revenue in 2020, which would reflect a stressful 38% decline on its sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of €1.10 in 2020, a sharp decline from a profit over the last year. Before this latest update, the analysts had been forecasting revenues of €348m and earnings per share (EPS) of €2.88 in 2020. So we can see that the consensus has become notably more bearish on lastminute.com's outlook with these numbers, making a pretty serious reduction to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for lastminute.com

The consensus price target fell 14% to €37.27, implicitly signalling that lower earnings per share are a leading indicator for lastminute.com'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. Currently, the most bullish analyst values lastminute.com at €46.20 per share, while the most bearish prices it at €28.34. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await lastminute.com shareholders.

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 38%, a significant reduction from annual growth of 13% 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 20% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - lastminute.com is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting lastminute.com to become unprofitable this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that lastminute.com's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of lastminute.com.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, which can be seen 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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