Investors in Aroundtown SA (ETR:AT1) had a good week, as its shares rose 5.3% to close at €2.55 following the release of its full-year results. Revenues of €1.5b reported a marginal miss, falling short of forecasts by 4.3%, but earnings were better than expected - statutory profits came in at €0.05 per share, a nice change from the loss the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, Aroundtown's eight analysts currently expect revenues in 2025 to be €1.53b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 611% to €0.34. In the lead-up to this report, the analysts had been modelling revenues of €1.58b and earnings per share (EPS) of €0.32 in 2025. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

See our latest analysis for Aroundtown

The consensus has made no major changes to the price target of €2.92, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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 Aroundtown at €4.20 per share, while the most bearish prices it at €1.70. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Aroundtown's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 3.7% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 17% annually. Factoring in the forecast slowdown in growth, it's pretty clear that Aroundtown is still expected to grow faster than the wider industry.

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The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Aroundtown's earnings potential next year. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at €2.92, 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 Aroundtown. Long-term earnings power is much more important than next year's profits. We have forecasts for Aroundtown going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Aroundtown (1 makes us a bit uncomfortable!) that you should be aware of.

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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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