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It's shaping up to be a tough period for 1&1 AG (ETR:1U1), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. 1&1 missed earnings this time around, with €1.0b revenue coming in 5.0% below what the analysts had modelled. Statutory earnings per share (EPS) of €0.34 also fell short of expectations by 16%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for 1&1
Taking into account the latest results, the current consensus from 1&1's 13 analysts is for revenues of €4.24b in 2025. This would reflect an okay 3.9% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 14% to €1.67. Yet prior to the latest earnings, the analysts had been anticipated revenues of €4.25b and earnings per share (EPS) of €1.67 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at €19.16. 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. The most optimistic 1&1 analyst has a price target of €30.00 per share, while the most pessimistic values it at €10.20. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that 1&1's rate of growth is expected to accelerate meaningfully, with the forecast 3.1% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that 1&1 is expected to grow much faster than its industry.