Yahoo Finance Temenos AG (VTX:TEMN) Released Earnings Last Week And Analysts Lifted Their Price Target To CHF62.97
It's been a good week for Temenos AG (VTX:TEMN) shareholders, because the company has just released its latest annual results, and the shares gained 3.5% to CHF71.92. The result was positive overall - although revenues of US$950m were in line with what the analysts predicted, Temenos surprised by delivering a statutory profit of US$1.59 per share, modestly greater than expected. 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 Temenos after the latest results.
See our latest analysis for Temenos
After the latest results, the 14 analysts covering Temenos are now predicting revenues of US$1.00b in 2023. If met, this would reflect a satisfactory 5.6% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 28% to US$2.04. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.00b and earnings per share (EPS) of US$1.95 in 2023. So the consensus seems to have become somewhat more optimistic on Temenos' earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.9% to CHF62.97. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Temenos at CHF87.44 per share, while the most bearish prices it at CHF47.67. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Temenos' growth to accelerate, with the forecast 5.6% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 8.6% annually. So it's clear that despite the acceleration in growth, Temenos is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Temenos' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Temenos going out to 2025, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Temenos that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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