One of the biggest stories of last week was how Evotec SE (ETR:EVT) shares plunged 32% in the week since its latest yearly results, closing yesterday at €9.16. It was a pretty bad result overall; while revenues were in line with expectations at €781m, statutory losses exploded to €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 Evotec after the latest results.

See our latest analysis for Evotec

Following the latest results, Evotec's ten analysts are now forecasting revenues of €874.2m in 2024. This would be a notable 12% improvement in revenue compared to the last 12 months. Evotec is also expected to turn profitable, with statutory earnings of €0.18 per share. Before this earnings report, the analysts had been forecasting revenues of €918.7m and earnings per share (EPS) of €0.23 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The analysts made no major changes to their price target of €25.40, suggesting the downgrades are not expected to have a long-term impact on Evotec's valuation. 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. There are some variant perceptions on Evotec, with the most bullish analyst valuing it at €50.00 and the most bearish at €14.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Evotec's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Compare this to the 49 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while Evotec's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Evotec. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at €25.40, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Evotec going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Evotec 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.