Beat Earnings: Signify NV narrowly beat analyst forecasts and analysts updated their models

Investors in mean NV (AMS:LIGHT) had a good week as its shares rose 9.6% to close at €24.18 following the release of its third quarter results. Overall, it looks like a credible result – although sales of 1.5 billion euros were in line with analysts' forecasts, Signify surprised with a statutory profit of 0.84 euros per share, which is a remarkable 18% above expectations. Following the earnings, the analysts have updated their earnings model and it would be good to know whether they think there has been a significant change in the company's prospects, or if it is business as usual. With this in mind, we've compiled the latest statutory forecasts to see what analysts are expecting for next year.

Check out our latest analysis for Signify

Taking into account the latest results, Signify's twelve analysts currently expect sales to be €6.32 billion in 2025, roughly in line with the last 12 months. Statutory earnings per share are expected to rise by 24% to €2.64. Before this earnings report, analysts had forecast sales of €6.36 billion and earnings per share (EPS) of €2.61 in 2025. So it's pretty clear that while analyst expectations have updated, there hasn't been any significant change for the company following the latest results.

The analysts confirmed their price target of €30.31, showing that the business is developing well and in line with expectations. However, it may be unwise to fixate on a single price target, as the consensus target is effectively the average of analysts' price targets. For this reason, some investors like to look at the range of estimates to see if there are any different opinions on the company's valuation. Currently, the most optimistic analysts value Signify at €42.00 per share, while the most pessimistic analysts value it at €23.50. Notice the big gap in analyst price targets? This implies to us that there is a fairly wide range of possible scenarios for the underlying business.

Now, looking at the bigger picture, one way we can understand these forecasts is how they compare to past performance and industry growth estimates. We would like to highlight that Signify's revenue growth is expected to slow, with its forecast annual growth rate of 1.2% through the end of 2025 well below its historical growth of 1.6% per year over the past five years. For comparison: Sales growth of 7.0% per year is forecast for the other companies in this industry with analyst coverage. Taking into account the forecast slowdown in growth, it is obvious that Signify is also expected to grow more slowly than other industry participants.

The conclusion

The most obvious conclusion is that the company's prospects have not changed much recently, and analysts have kept their profit forecasts unchanged, in line with previous estimates. Fortunately, analysts also confirmed their revenue estimates, suggesting they are in line with expectations. However, our data suggests that Signify's revenue is likely to underperform the broader industry. The consensus price target remained at €30.31, with recent estimates not being enough to have an impact on their price targets.

With that in mind, we wouldn't jump to a conclusion about Signify. Long-term profitability is much more important than next year's profit. At Simply Wall St we have a full range of analyst estimates for Signify out to 2026, which you can view for free on our platform here.

And what about the risks? Every company has them, and we discovered them 2 warning signs for Signify you should know that.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term focused analysis based on fundamental data. Note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.